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~.*

A TREATISE

ON THE

LAW OF PARTNERSHIP

BY

WALTER A. SHTJMAKER

SECOND EDITION

ST. PAUL, MINN.

KEEFE-DAVIDSOX CO.

1905

Copyright, 1901,

BY

KEEFE-DAV1DSON LAW BOOK CO.

Copyright, 1905,

BY

KEEFE-DAVIDSON CO.

STATE JOURNAL PRINTING COMPANY,
Printers and Stereotypers,
MADISON, wis.

PREFACE TO FIRST EDITION.

The important position which the contract of partnership
has held for more than a century in the commercial affairs of
England and the United States has been such that the law
bearing on it has been subjected to extensive judicial investi-
gation, and after undergoing; many changes, is at the present
rime well settled in most of its phases. This fact appears
to justify the seeming presumption of entering on a field of
jurisprudence embraced by the works of such eminent writers
as Lord Lindley and Theophilus Parsons. What was im-
possible during the formative period in which they wrote
now seems practicable, — the presentation of a complete analy-
sis in general propositions of the law of partnership; in other
words, a substantial codification based not on legislative en-
actment, but on the concensus of judicial decision. Such a
presentation, invaluable to the student, and nearly as much
so to the practitioner, lias been the aim in formulating the
black letter paragraphs in the present work. In the text, the
general statemenl of the law is elaborated, and its history and
growth outlined.

The scope ami theory of the work render alike unnecessary
and impracticable, a complete digest of the cases. The lead-
ing cases illustrating the growth of the law arc fully cited;
on all novel or disputed propositions the authorities have been
exhaustively collated, and on well settled rules sufficient cases
are cited to thoroughly establish and illustrate the doctrine,
including all the late cases of importance. This has required
an examination of authorities greater than would he de-

iv PREFACE.

tnanded by any other plan of presentation. The aim in both
text and citations has been to make a boot \'<>v all the states,
and any apparenl predominence of citations from certain
states will be found due to the prominenl pari played by such
states in establishing the commercial law of the United
States.

Considerable work on this manual has been done by an-
other, lmt nil such T have subjected to rigid scrutiny and re-
vision. W. A. S.

PREFACE TO SECOND EDITION.

In view of the general approval with which the first edi-
tion was received, the preparation of the second has involved
little besides the presentation of the result of the recent de-
cisions. Every decision on the subject since the first edition
was issued has been examined, and not only all that present
novel applications of the law, but all that bear on unsettled
questions, have been added. Moreover a considerable num-
ber of cumulative decisions, selected with special reference to
their exhaustiveness of discussion, have been inserted. Few
changes in the text have been found needful, but such as
might clarify the statement and better present the results of
recent holdings have been made. W. A. S.

TABLE OF CONTENTS.

CHAPTER I.

WHAT CONSTITUTES A PARTNERSHIP.

§ 1. Partnership Defined.

2. Essential Elements.

3. Contract Between Partners.
4-5. Delectus Personarurn.
6-7. Subpartnerships.

8. Sharing Profits.

9. Former Doctrine.

10. Modern Doctrine.

11. Tests of Partnership.

12. Mutual Agency as a Test.

13. Intention the Real Test. -

14-15. What Must be Intended— Common Ownership of
Profits.

16. Sharing Profits and Losses as Evidence of Intention.

17. Sharing Both Profits and Losses.

18. Sharing Profits, With Nothing Said About Losses.

19. Sharing Profits, With Stipulation Against Losses.

20. Sharing Gross Returns.

21. Sharing Losses Only.

22. Common Stock or Capital.

23. Questions of Law and Fact.

24. Contracts for Future Partnerships.

25. Associations Not for Profit.

26. Co-Ownership Distinguished.

27. Corporations Distinguished.

28. Promoters of Corporations or Joint Stock Companies.
29-31. Stockholders in Illegal or Defective Corporations.
32-33. Partnership as to Third Persons.

34. By Sharing Profits.
35-37. By Holding Out.

iii TABLE OF CONTENTS.

CHAPTER II.

CLASSIFICATIONS AND DEFINITIONS.

§ 38-40. Partnerships Classified.
41. Universal Partnerships.
!_'. General Partnerships.
43. Special or Particular Partnerships.
II. Trading and Nontrading Partnerships.

15. Partners Classified.

CHAPTER III.

CONTRACT OF PARTNERSHIP.

§ 46. General Requisites.

47. Formalities.

48-49. Who May Become Partners.

50. Consideration.

51. Purposes of Partnership.

52. Illegal Partnerships.

CHAPTER IV.

FIRM AS AN ENTITY.

§ 53. At Common Law.
54-55. Limited Recognition as an Entity.

CHAPTER V.

FIRM NAME AND GOOD WILL.

§ 56. Necessity of Firm Name.
57-58. Use and Purpose of Firm Name.
59-60. What Name May be Adopted.
60a-60cZ. Use of Firm Name After Dissolution.

CHAPTER VI.

CAPITAL OF FIRM.

§ 61. Definition and Nature.

62. What May be Contributed.
C3-G5. Rights of Partners.

66-68
69-71
72-73

74
75-76
77-78
79-80

81

TABLE OF CONTENTS. ix

CHAPTER VII.

PARTNERSHIP PROPERTY.

What Constitutes.

How Title is Held.

Nature of Partner's Interest.

Sale or Partition.

Proportionate Share of Each Partner.

Attachment or Execution for Individual Debt of Partner.

Conversion of Firm Realty Into Personalty.

Changing Joint Into Separate Property, and Vice Versa.

CHAPTER VIII.

RIGHTS AND LIABILITIES OF PARTNERS INTER SE.

§ 82. Articles of Partnership.

83. Construction of Articles.

84. Right to Participate in Management.

85. Duty to Observe Good Faith.

86. Obtaining Private Benefits.
87-88. Right to Carry on Separate Business.

89. Right to Contribution and Indemnity.

90. Right to Compensation.
91-92. Right to Interest on Balances.

93. Partnership Accounts.

94. Duty to Conform to Partnership Articles.

95. Duty to Exercise Care and Skill.
96-98. Power of Majority.

99-100. Division of Profits.

101. Expulsion of Partner.

102-103. Partner's Lien.

CHAPTER IX.

RIGHTS AND LIABILITIES OF PARTNERS AS TO THIRD
PERSONS.

§ 104. Power of Partner to Bind Firm.
105-106. Actual Authority.
107-108. Apparent or Implied Authority.
109-110. Restriction by Dissent.

111-112. Liability on Contracts.

TABLE OF CONTENTS.

113. Liability for Torts, Frauds and Breaches of Trust.

113a. Liability for Crime.

II ! lir,. Nature of Liability.

116. Extent of Liability.

117. Commencement of Liability.

118. Termination of Liability.

119. For Future Acts.
120-121. Notice of Dissolution.

122. For Past Acts.

L23. Application of Assets to Liabilities.

124. Application by Partners.

125-126. Application by Court.

127-128. Priorities in Firm Property.

129-132. Priorities in Separate Property.

CHAPTER X.

ACTIONS.

§ 133. Actions in Firm Name.

134. Actions by the Firm.

135. Disqualification of One Partner to Sue.

136. Actions against the Firm.

137. Actions Between Partners.

138. Actions Between Firms "With a Common Member.

139. Actions on Individual Obligations.
140-141. Suits in Equity.

CHAPTER XI.

DISSOLUTION.

§ 142. How Effected.

143. By Operation of Law.

144. By Act of Parties.

145. By Decree of Court.

146. Grounds for Dissolution.

147. Rights, Powers, and Liabilities after Dissolution.

148. Of Partners Generally.

149. Of Liquidating Partners.

150. Of Surviving Partners.
151-152. Of Estate of Deceased Partner.

153. Of Creditors.

TABLE OF CONTENTS. XL

CHAPTER XII.

JOINT-STOCK COMPANIES.
§ 154-155. Definition and Nature.

CHAPTER XIII.

LIMITED PARTNERSHIPS.
§ 15C-157. Definition and Nature.

LAW OF PARTNERSHIP.

CHAPTER I.

WHAT CONSTITUTES A PARTNERSHIP.

1. Partnership Defined.

2. Essential Elements.

3. Contract between Partners.
4-5. Delectus Personarum.
6-7. Subpartnerships.

8. Sharing Profits.

9. Former Doctrine.

10. Modern Doctrine.

11. Tests of Partnership.

12. Mutual Agency as a Test.

13. Intention the Real Test.

14-15. "What Must be Intended — Common Ownership of Profits.

16. Sharing Profits and Losses as Evidence of Intention.

17. Sharing both Profits and Losses.

18. Sharing Profits, "With Nothing Said about Losses.

19. Sharing Profits, with Stipulation against Losses.

20. Sharing Gross Returns.

21. Sharing Losses Only.

22. Common Stock or Capital.

23. Questions of Law and Fact.

24. Contracts for Future Partnerships.

25. Associations not for Profit. ,

26. Co-Ownership Distinguished.

27. Corporations Distinguished.

28. Promoters of Corporations or Joint Stock Companies.
29-31. Stockholders in Illegal or Defective Corporations.
32-33. Partnership as to Third Persons.

34. By Sharing Profits.

35-37. By Holding out.

1

WHAT CONSTITUTES A PARTNERSHIP.

PaETNEESHIP 1 >]•: FIXED.

I. Partnership is the relation subsisting between two or
more persons who have contracted together to share, as
common owners, the profits of a business carried on by
all or any of them on behalf of all of them.

Most of the definitions of a partnership to be found in the
books, a few of which arc sel out below in the notes,1 are
fairly open to the criticism that they either omit entirely, or
fail to give prominence to, the qualification that the profits
must be shared between the contracting parties as common

i Various definitions of partnership:

"Partnership is the association of two or more persons for the pur-
pose of carrying on business together, and dividing its profits be-
tween them." Civ. Code, N. Y., § 1283; Civ. Code, Cal., § 2395; Comp.
Laws Dak. 1887, § 4027; Rev. Code, N. D., § 4370.

"Partnership is the relation which subsists between persons who
have agreed to combine their property, labor, or skill in some busi-
ness, and to share the profits thereof between them." Indian Con-
tract Act, 239.

By the English partnership act of 1890 (53 & 54 Vict. c. 39), which
went into effect January 1, 1891, "partnership" has been defined as
"the relation which subsists between persons carrying on a business
in common, with a view to profit." Business, within the meaning
of the act, includes every trade, occupation, or profession. The act
expressly excludes from its operation joint-stock companies, cost-
book mining companies, and many others which differ from ordi-
nary partnerships in many particulars. This statutory definition,
taken in connection with the other sections of the act, is now, in
England, the ultimate test applicable to the determination of the
question whether, in any particular case, a partnership does or does
not exist.

"Partnership is a contract of two or more competent persons to
place their money, effects, labor, and skill, or some or all of them,
in lawful commerce or business, and to divide the profit and bear
the loss in certain proportions." 3 Kent, Comm. 33. Followed in
Waggoner v. First Nat. Bank, 43 Neb. 84, 61 N. W. 112. A partner-
ship is the relation created by a contract between two or more per-

PARTNERSHIP DEFINED. 3

owners thereof, and not merely because a portion of them is
due to a party as a debt. As will be seen hereafter, this com-
mon ownership of the profits is the decisive test of the exist-
ence of a partnership.2 This objection has been avoided by de-
fining a partnership as the contract relation subsisting between
persons who have combined their property, labor, or skill in
an enterprise or business as principals, for the purpose of
joint profit.3 But this definition has, in turn, been criticised
as giving a synonym, rather than a definition, as mutual
agency results from partnership, rather than partnership from
mutual agency.4 This matter will be more fully considered
in a succeeding section of this work.5

A partnership is often called a contract, but this_is_inac-
curate. It is the relation or status resulting from a contract,
just as marriage is a status, and not a contract.0 It should

sons to place their money, effects, labor, or skill, or some or all of
them, in lawful commerce, and divide the profits between them. In
re Gibb's Estate, 157 Pa. 59, 27 Atl. 383.

'•. These definitions certainly justify the statement made in Meehan
' v. Valentine, 145 U. S. 611, Burdick's Cases, 80, Mechem's Cases, 103,
that "the various definitions of a partnership have been approximate,
rather than exhaustive." While it is true that a partnership is all
it is said to be in the above definitions, something more is necessary
to define it, for all the conditions named might be present, and still
no partnership exist, as in the case of a servant or agent sharing in
the profits as compensation, in lieu of salary. The qualification
needed is that the sharing must be by reason of a common owner-
ship in the profits.

^ See infra, § 10, "Modern Doctrine," and infra, §§ 14, 15, "What
Must be Intended — Common Ownership of Profits.

8 1 Bates, Partn., p. 1. "A partnership is a voluntary, unincor-
porated association of individuals standing in the relation of prin-
cipals for carrying out a joint operation or undertaking for the pur-
pose of joint profit." Dixon, Partn. 1. See, also. Cox v. Hickman,
8 H. L. Cas. 268, and Eastman v. Clark, 53 N. H. 276.

* Pooley v. Driver, 5 Ch. Div. 471 et seq.; Meehan v. Valentine, 145
U. S. 611.

t> See post, § 121, "Mutual Agency as a Test."

« In this respect, the definition of a contract given in 3 Kent,

4 WHAT CONSTITUTES A PARTNERSHIP.

also be noted thai the won! "partnership" denotes a combina-
tion of persons, and not merely a combination of capital.7
" So ^unsatisfactory haw Been Ehe many definitions of a
"partnership," that one classic writer upon the subject, with-
out attempting to define the term, contents himself with point-
ing ou1 the Leading ideas involved \n the term,8 and this is,
perhaps, after all, the best method tf conveying correct ideas
upon the subject.

Essential Elements.

2. The essential elements of every true partnership are
(a) A contractbetween the jpartnersx and _

\jr \ (b) A sharing of profits.^

Same — Contract Between Partners.

3. A true partnership is always formed by virtue of a con-
tract between all the partners, and never by operation of
law.

A partnership only exists between persons who have con-
tracted together for those things which the law has declared to
constitute a partnership. In the absence of such an agree-
ment, a partnership is never formed by operation of law.9

Comm. 23, and quoted in a preceding note of this chapter, is inac-
curate.

7 In this respect, the definition of a partnership given in Pars.
Partn. c. 2, § 1, as the combination by two or more persons of capital,
etc., has been criticised as inaccurate. See 1 Lindl. Partn. p. 3,
note 1.

s Lindl. Partn. (15th ed.) p. 1.

b Wilson's Ex'rs v. Cobb's Ex'rs, 28 N. J. Eq. 177; Phillips v. Phil-
lips, 49 111. 437; Bushnell v. Consolidated Ice Mach. Co., 138 111. 67,
27 N. E. 596; Metcalf v. Redmon, 43 111. 264; Bishop v. Georgeson,
60 111. 484; Freeman v. Bloomfield, 43 Mo. 391; Ingals v. Ferguson,
59 Mo. App. 306; Hedge's Appeal, 63 Pa. 273; In re Gibb's Estate,

ESSENTIAL ELEMENTS.

5

Thus, no partnership exists between a father and his son, who
works for him without salary, and without any agreement be-
tween them.10 So, a husband and wife are not partners,
though they purchase property jointly.11 The joint prosecu-
tion of a lawsuit does not create a partnership between the
parties as to the subject-matter in dispute, in the absence of
an agreement to that effect,12 nor does it create a partnership
between the attorneys of a party.123, A person cannot be
made a partner against his will, by accident, or the conduct of
others.13

Agreements not Concluded.

Since a paxtiisrship results only from a flontr.net between
the parties, i! follows that there is no partnership unless all
the parties have mutually assented to the same terms, for in
the absence of such mutual assent, there is no contract,14

157 Pa. 59, 70, 27 Atl. 383. But compare Goddard v. Hodges, 1 Cromp.
& M. 33. Partnerships by estoppel are no exceptions to this rule, for,.
as will be seen, such are not real partnerships-inter se, but individ-
uals are merely held liable to third persons for each other's acts as
though they were partners. See infra, § 35.

io Phillips v. Phillips, 49 111. 437.

ii Ingals v. Ferguson, 59 Mo. App. 299, 306.

12 Wilson's Ex'rs v. Cobb's Ex'rs, 28 N. J. Eq. 177. Where a man
and women living with him as his wife jointly accumulate property,
after his death such woman cannot claim the property as surviving
partner, to the exclusion of the real wife's claim by inheritance.
Estate of Winters, Myr. Prob. (Cal.) 131.

12a Willis v. Crawford, 38 Or. 522, 63 Pac. 985, 64 Pac. 866, 53 L.
R. A. 904.

13 Freeman v. Bloomfield, 43 Mo. 391. The creditors of a partner
who take his interest by assignment or on execution cannot be in-
volved, against their consent, in the responsibilities of a partner-
ship. They are entitled to take it without the risk and burden of
being partners. Marquand v. New York Mfg. Co., 17 Johns. (N. Y.)
525.

1* "In negotiations for a partnership, the parties deal as strangers,
for there is no confidential relation existing between them until the

6 WHAT CONSTITUTES A PARTNERSHIP.

4. Delectus Personarum. — The contract creatinj

nership must have been entered into by all the part-
ners.

5. No person can be introduced as a partner without the
consent of all those who, for the time being, are mem-
bers of the firm, except in the case of — r

Exceptions — / * n 7P"\fl A_ -Vvi^t^Z

(a) Mining partnerships, and J 7 **—— '

(b) Joint-stock companies^. C^yu^>-n^X — ^ ^

It is a well-established principle that a partnership can

exist only by the voluntary contract of all the persons who are
partners.15 One partner cannot, without the consent of the
other partners, introduce a third person as partner into the

partnership is actually formed." Uhler v. Semple, 20 N. J. Eq. 288.
See, also, Metcalf v. Redmon, 43 111. 264. Persons who have agreed
to become partners, and have acted as such, will be held to be part-
ners inter se, though they may not have understood the conditions
of the agreement alike. Cook v. Carpenter, 34 Vt. 121.

is Channel v. Fassitt, 16 Ohio, 166; Burnett v. Snyder, 76 N. Y.
344; Elderkin v. Winne, 1 Chand. (Wis.) 27; Kingman v. Spurr, 7
Pick. (Mass.) 235; Central City Bank v. Walker, 66 N. Y. 431; Hay-
ward v. Barron (Com. PI.), 19 N. Y. Supp. 384. See, also, post, §§ 6,
7, "Sub-Partnerships." "To form a partnership, as least so far as
the parties themselves are concerned, the assent of both the con-
tracting parties is required." Bennett v. Pulliam, 3 111. App. 185,
190, holding that an unaccepted proposition of one party is insuffi-
cient. Where, by an article of agreement, two persons agree to carry
on a trade or business of a particular nature, and in the same in-
strument a third party joins with one of the other parties to carry
on another trade or business for their separate account, the relation
of partners is not created between the three, so as to enable a per-
son dealing with either branch of the concern to maintain an ac-
tion against the whole. Elderkin v. Winne, 1 Chand. (Wis.) 27.
Where stock in a joint-stock company is subscribed and paid for by
one person in the name of another, who does not know of or consent
to it, and has not ratified it, the latter is not liable, but the former
is. Wehrman v. McFarlan, 9 Ohio Dec. 400.

ESSENTIAL ELEMENTS. 7

concern.10 The consent to receive a new member as a part-
ner must be unanimous. A majority of the partners can not

ii i -

introduce a new member, against the will of any partner.17

The relations existing between partners are of such an inti-
mate and confidential nature, and mutual trust and confidence
is so essential to the successful prosecution of the partnership
business, that no one can be made the partner of another
without or against his consent.ls This_jDriucipleJ.s__called^
"delectus persona rum ." and is said to be one of the funda-
mental principles of partnership law. The important conse-

16 Murray v. Bogert, 14 Johns. (N. Y.) 318. Every member must
assent to be a partner of all the others. Gray v. Gibson, 6 ''Mien. sOO.
Two of 'five members or^TopaTtnersKTp, in their individual capacity,
entered into an agreement with defendant C. B. S., in which it was
stated that it was for the interest of said firm that C. B. S. should
have an interest, and become a copartner; therefore it was agreed
that he "is a copartner in the firm," and that he shall be entitled to
receive from the other parties to the agreement one-third of the
profits earned and received by each; he agreeing to pay one-third
of any losses sustained by either "by reason of their connection as
copartners, or otherwise, with the firm." In an action by a creditor
of the firm, in which it was sought to charge C. B. S. as a partner,
it was held that the agreement did not constitute him a partner, as
all the partners had not joined or concurred therein. Burnett v.
Snyder, 76 N. Y. 344. One partner cannot, without the consent of
the other, introduce a stranger into the firm, nor can he, without
such consent, make the other partner a member of another firm;
but such consent may be implied from the acquiescence and acts of
the parties; and if such other partner is made acquainted with the
facts, he ought to dissent from the arrangement; otherwise he will
te bound by it. Mason v. Connell, 1 Whart. (Pa.) 381. One mem-
ber of a partnership cannot make such a contract as will involve the
creation of another partnership between his owrn firm and other
parties, so as to bind thereby his copartners, unless he has other au-
thority than that which is incident to the mere relation of partners.
Buckingham v. Hanna, 2<Hnd. 110. See, to the same effect, Love v.
Payne, 73 Ind. 80, and Tabb v. Gist, 1 Brock. 33, Fed. Cas. No. 13,719.

n Meaher v. Cox, 37 Ala. 201.

lsAs to partnerships as to third persons by estoppel or holding
out, see post, §§ 35-37.

S WHAT CONSTITUTES A PARTNERSHIP.

quence of this principle is that the transfer by one partner of
his interest in the firm does not constitute his transferee a
partner with the remaining members unless they consent
thereto.1'''

A.S will he seen hereafter, any change in the membership of.
the firm will ordinarily operate as a dissolution ; 20 and even
where the remaining partners consent to the introduction of
a new member, the old firm will ordinarily be considered as
dissolved, and a new one instituted from the date of such
t hange in the membership.21 Of course, consent to the trans-
fer of a partner's interest, and the reception of the transferee
into the firm, may be given in advance,22 and it is not unusual
to insert such a stipulation once for all in the original partner-
ship articles, at least so far as the personal representatives of
a deceased partner are concerned.23 A subsequent ratifica-

10 Merrick v. Brainard, 38 Barb. (N. Y). 574; McGlensey v. Cox,
1 Phila. (Pa.) 387; Mason v. Connell. 1 Whart. (Pa.) 3S1; Meaner
v. Cox, 37 Ala. 201; Jones v. Scott, 2 Ala. 58, 65; Love v. Payne, 73
Ind. 80, 38 Am. Rep. Ill; Taylor v. Penny, 5 La. Ann. 7; Jones v.
O'Farrel, 1 Nev. 354; Fay v. Waldron (Sup.), 3 N. Y. Supp. 894;
McCall.v. Moss, 112 111. 493; Cochran v. Perry, 8 Watts & S. (Pa.)
262; Horton's Appeal, 13 Pa. 67. Where a partnership, for the pur-
pose of running stage coaches, issued to its members certificates of
their shares in the joint stock, containing a provision that the shares
should not be transferred without the consent of the directors and
treasurer, and the plaintiff, to whom a share had been assigned,
without such consent, brought a bill in equity to compel the com-
pany to account, alleging himself to be a partner, it was held that
he was not a partner, and that the bill could not be sustained. King-
man v. Spurr, 7 Pick. (Mass.) 235.

20 See post, § 143. See, also, cases cited in preceding note.

2i See post, § 143. As a consequence of the rule in the text, an
incoming partner is not liable for the debts of the firm incurred be-
fore he was admitted, unless he expressly assumes them. Christy
v. Sill, 131 Pa. 492, 19 Atl. 295, 297. See, also, post, § 117.

22 Fox v. Clifton, 9 Bing. 119; Mayhew's Case, 5 De Gex, M. & G.
837.

23Alvord v. Smith, 5 Pick. (Mass.) 232; Lindl. Partn. p. 433. The

ESSENTIAL ELEMENTS. 9

tion is equivalent to a nri^r rvmspnt.24 Consent may be im-
plied from a continued recognition of tlie new member as a
partner without objection.25

right to introduce a stranger into the firm will not be implied from
a stipulation in the partnership articles, reserving to the copartners
the first' option to purchase a partner's share in case he desires to
sell. McGlensey v. Cox, 1 Phila. (Pa.) 387.

Where articles of partnership contain power for one partner to
nominate and introduce into the firm a person for the whole or any
part of his share in the business and the profits thereof, that is a
consent by the other partners to admit into the partnership any per-
son who is willing to be introduced into the firm and to observe the
conditions of his admission; and the nominee, on accepting his
nomination, becomes in the eye of the courts a partner, and entitled
as against the other partners to such relief as courts of equity are
in the habit of granting to persons who stand in the relationship of
partners to others. Byrne v. Reid (1902), 71 L. J. Ch. Div. 830.

" But it is unlikely that such a result would be reached in the
United States. The English doctrine of continuing partnerships is
here generally repudiated. Burdick, Partn. 330. In the words of one
of our courts: 'There can be no such thing as indissoluble partner-
ship. Every partner has an indefeasible right to dissolve the part-
nership. . . . Even where the partners covenant with each other
that the partnership shall continue seven years, either partner may
dissolve it the next day; the only consequence being that he thereby
subjects himself to a claim for damages for breach of his covenant.'
Skinner v. Dayton (1822), 19 Johns. 513, at p. 538, approved and ap-
plied. Solomen v. Kirkwood (1884), 55 Mich. 256." 3 Columbia
L. R. 109.

24 Mason v. Connell, 1 Whart. (Pa.) 381; Meaher v. Cox, 37 Ala.
201; Buckingham v. Hanna, 20 Ind. 110; Love v. Payne, 73 Ind. 80.

25 Meaher v. Cox, 37 Ala. 201; Mason v. Connell, 1 Whart. (Pa.)
381; Wood v. Connell, 2 Whart (Pa.) 542; Rosenstiel v. Gray, 112
111. 282; Tabb v. Gist, 1 Brock. 33, Fed. Cas. No. 13,719. But one
need not notify the world that he does not assent to being a partner
with the transferee, in order to escape liability for the latter's acts.
Jones v. O'Farrel, 1 Nev. 354. New members cannot be introduced
into an existing partnership, even by a majority of the partners,
without the consent of the others; yet, if the others recognize and
treat the new members as partners, and continue the business with
them under the original articles this is sufficient to make them part-
ners, and to render the original articles operative as between them.
Meaher v. Cox, 37 Ala. 201.

10 WHAT CONSTITUTES A PARTNERSHIP.

Exceptions I" Rule — Mining Partnerships.

In "mining partnerships," so called, there is no delectus
personarum, bul tl>e share of any partner may be freely trans-
ferred by death or assignment, without, the consent of the co-
partners, and without working a dissolution.26 For this rear.
son mining partnerships have beer said no1 to be true partner-
ships^ hut rather a cm— between tenancies in common and,
partnerships proper.28 A "mining partnership," in this sense
of the term, exists between the tenants in common of a mine,
who work it together and divide the profits in proportion to
their several interests.29 Of course, if the parties so intend,
they may form an ordinary partnership for the purpose of
carrying on mining- by entering into an appropriate contract
to that effect. In such a case, there will, of course, be a de-
lectus personarum. But such a partnership must be created
by a special agreement, and will not result merely from they

aeKalin v. Smelting Co., 102 U. S. 641; Bissell v. Foss, 114 U. S.
252; Kimberly v. Arms, 129 U. S. 512, 530; Taylor v. Castle, 42 Cal.
267; Nisbet v. Nash, 52 Cal. 540; Jones v. Clark, 42 Cal. 180; Higgins
v. Armstrong, 9 Colo. 38, 10 Pac. 232; Skillman v. Lachman, 23 CaL
203; Duryea v. Burt, 28 Cal. 569; McConnell v. Denver, 35 Cal. 365;
Childers v. Neely, 47 W. Va. 70, 34 S. E. 828, 81 Am. St. Rep. 777.

27 Duryea v. Burt, 28 Cal. 569; Kahn v. Smelting Co., 102 U. S. 641.

2s Bates, Partn. § 14. Unincorporated ditch companies, organized
for the sale of water to miners and others, the stock in which is
bought and sold at the pleasure of the owners, without consulting
the co-owners, differ from ordinary commercial partnerships. Some
of the incidents of a partnership pertain to such companies, and
some of mere tenancies in common likewise pertain to them. Mc-
Connell v. Denver, 35 Cal. 365.

29 Nolan v. Lovelock, 1 Mont. 224; Bybee v. Hawkett, 12 Fed. 649;
Skillman v. Lachman, 23 Cal. 198; Judge v. Braswell, 13 Bush (Ky.),
67, 26 Am. Rep. 185; Babcock v. Stewart, 58 Pa. 179; Burgan v.
Lyell, 2 Mich. 102, Burdick's Cases, 312; Snyder v. Burnham, 77 Mo.
52; Higgins v. Armstrong, 9 Colo. 38. That parties are tenants in
common is insufficient. Hartney v. Gosling, 10 Wyo. 346, 68 Pac.
1118, 98 A. S. R. 1005.

ESSENTIAL ELEMENTS. 11

common ownership and operation of a mine,30 though the
agreement need not he express but may he implied from the
acts of the parties.303-

Sam e — Jo int-Stoch Com pan ies.

Joint-stock companies fire, a species of partnership in which
the capital stock is divided into transferable^shares, much in
the nature of shares in a corporation. There is, of course, no
delectus personarum in such an association.31

6. Subpartnerships.— A subpartnership exists wherp nnp

partner in an existing firm agrees to share his propor- $
tion of the profits with a third person in suqft a manner f

as to constitute himself and such third person partners.

7. Such a contract does not violate the principle of delectus

personarum, for it does not make such third person a
partner with the other partners in the original firm.

A jmjjpartnership, is, as it were, a partnership within a
partnership : It presupposes the existence of a partnership,
to which it is itself subordinate. An agTeement to share pro- .
fits as common owners, constitutes a partnership only between
the parties to the agTeement. If, therefore, several persons
are partners, that one of them agrees to share the profits

-"Bradley v. Harkness, 26 Cal. 76; Stapleton v. King, 33 Iowa, 28,
Decker v. Howell, 42 Cal. 636; Duryea v. Burt, 28 Cal. 569, 587; Craw-
shay v. Maule, 1 Swanst. 518; Lawrence v. Robinson, 4 Colo. 567.
See, also, Kimberly v. Arms, 129 U. S. 512.

There must be an agreement to work the mine for the joint profit
of the parties. Doyle v. Burns, 123 Iowa, 488, 99 N. W. 195.

Cotenants by coworking become mini-ng partners without special
contract. Childers v. Neely, 47 W. Va. 70, 34 S. E. 828, 81 A. S. R.
777.

soa Hartney v. Gosling, 10 Wyo. 346, 68 Pac. 1118, 98 A. S. R. 1005.

a1 See post, c. 12, "Joint-Stock Companies." See, also, Hedge's
Appeal, 63 Pa. 273.

12 WHAT CONSTITUTES A PARTNERSHIP.

with a stranger as common owners, does not make the
stranger a partner in the original linn."'2 The principle cf
delectus personarurrij already explained, forbids this. The
resull of such an agreement is to constitute what is called a
"subpartnership," — thai is to say, it makes the parties to it
partners inter se; but it in no way affects the other members
of the original firm.88 Even knowledge and approval of the
subpartnership upon the part of the other members of the
principal firm will not make the subpartner a partner in such
firm upon the principle of consent or ratification." l

A subpartner is not liable for the debts of the principal
firm.35 Bulwhere. .thc^o--calle(La^nl '] »a rtner" owns the entire
interest, including profits andpropertyT be must be. eonsirlereiL
as the real partner, standing in the place of the ostensible one,
and assuming his obligations and Liabilities.36

32 Ex parte Barrow, 2 Rose, 252; Meyer v. Krohn, 114 111. 574, 2
N. E. 495; Reynolds v. Hicks, 19 Ind. 113; Burnett v. Snyder, 81
N. Y. 550, Mechem's Cases, 125; Setzer v. Beale, 19 W, Va. 274;
Reilly v. Reilly, 14 Mo. App. 62; Bybee v. Hawkett, 12 Fed. 649;
Nirdlinger v. Bernheimer, 133 N. Y. 45, 30 N. E. 561.

ss Lindl. Partn. p. 48.

34 Burnett v. Snyder, 81 N. Y. 550, Mechem's Cases, 125; Channel
v. Fassitt, 16 Ohio, 166; Newland v. Tate, 3 Ired. Eq. (N. C.) 226.

35 Burnett v. Snyder, 81 N. Y. 550, Mechem's Cases, 125; Newland
v. Tate, 3 Ired. Eq. (N. C.) 226; Meyer v. Krohn, 114 111. 574, 2 N. E.
495; Bybee v. Hawkett, 12 Fed. 649; Reynolds v. Hicks, 19 Ind. 113.
Under the doctrine which formerly almost universally prevailed —
tnat any sharing in the profits rendered one liable as a partner — a
subpartner was held liable for the debts of the principal firm. Fitch
v. Harrington, 13 Gray (Mass.) 468; Bering v. Crafts, 9 Mete.
(Mass.) 380. But, as will be seen hereafter, this doctrine was
thoroughly exploded by the great case of Cox v. Hickman, 8 H. L.
Cas. 268, Burdick's Cases, 65, Mechem's Cases, 70, and now it is al-
most universally conceded that a mere sharing in the profits will not
render one liable as a partner.

so Webb v. Johnson, 95 Mich. 325, 54 N. W. 947. See, also, God-
<lard v. Hodges, 1 Cromp. & M. 33.

ESSENTIAL ELEMENTS. 1&

Same — Sharing Profits.

8. Whether or not a sharing of the profits of a business cre-
ates a partnership is best considered with reference
to —

(a) The former doctrine, and

(b) The modern doctrine.

9. Former Doctrine. — Formerly all persons sharing the
profits of a business were held liable as partners to
third persons for the business debts of each other, irre-
spective of whether they were really partners, as be-
tween themselves or not.

Until the decision of the celebrated case of Cox

man, in 1860^ the law was universally regarde^asL-settled.
that any sharing in the profits of a business constituted a part-
iiershirjj or at least subjected the parties so sharing to a part-
ner's liability, so far as third persons were concerned,37 and
all traces of this doctrine have not yet disappeared.38 While

37 Grace v. Smith, 2 W. Bl. 998, Burdick's Cases, 45, Mechem's
Cases, 61; Waugh v. Carver, 2 H. Bl. 235, 2 Smith, Lead. Cas. (9th
ed.) 1178, Burdick's Cases, 47, Mechem's Cases, 67; Cheap v. Cra-
mond, 4 Barn. & Aid. 663; Ex parte Hamper, 17 Ves. 412; Heyhoe v.
Burge, 9 C. B. 431; Purviance v. McClintee, 6 Serg. & R. (Pa.) 259.

aswessels v. Weiss, 166 Pa. 490, 31 Atl. 247; Edwards v. Tracy,
62 Pa. 374; Lord v. Proctor, 7 Phila. (Pa.) 630; Merrall v. Dobbins,
169 Pa. 480, 32 Atl. 578, Burdick's Cases, 86; Leggett v. Hyde, 58
N. Y. 272; Burdick's Cases, 50; Hackett v. Stanley, 115 N. Y. 625,
22 N. E 745, Burdick's Cases, 57; Burnett v Snyder, 81 N. Y. 550,
Mechem's Cases, 125.

In Georgia sharing in the profits, as profits, renders the parties
to the transaction partners as to third parties. Brandon & Dreyer
v. Connor, 117 Ga. 759, 63 L. R. A. 260. The court refers to the rule
laid down in the first edition of this work (post, §§ 10, 34), and
states that the trend of modern authorities is to support such rule,
but it feels bound to follow the rule laid down in Buckner v. Lee,
8 Ga. 285, and followed in numerous cases, so long as such cases
stand unreviewed and unreversed.

14 WHAT CONSTITUTES A PARTNERSHIP.

this view of the nature of a partnership prevailed, it was held
thai one who received a share in the profits as compensation
in lieu of salary for services rendered,89 or rent of property
used in the business,40 or interest on, or in payment of money
loaned,41 was liable as a partner to third persons for the debts
of the firm, irrespective of the actual intenl of the parties,
and it was immaterial whether they were partners inter se or-
no!.1- The only reason ever assigned for this arbitrary rule

-'Cheap v. Cramonrl, 4 Barn. & Aid. 663; Ex parte Rowlandson, 1
Rose, 92; Ex parte Digby, 1 Deac. 341; Rowland v. Long, 45 Md. 439;
Taylor v. Terme, 3 Har. & J. (Md.) 505; Strader v. White, 2 Neb.
348; Miller v. Hughes, 1 A. K. Marsh. (Ky.) 181; Lomme v. Kintzing,
1 Mont. 290; Hackett v. Stanley, 115 N. Y. 625, 22 N. E. 745, Burdick's
Cases, 57.

to I >alton City Co. v. Dalton Mfg. Co., 33 Ga. 243; Dalton City Co.
v. Hawes, 37 Ga. 115. And see Adams v. Carter, 53 Ga. 160; Buck-
ner v. Lee, 8 Ga. 285. "It avails nothing that they specify that they
shall receive one-half the net profits 'as rent.' It is apparent that
what they are to receive will be more or less, or nothing at all, as
the 'accidents of trade' may determine. This being ascertained, the
conclusion of law is that whatever they may receive will be re-
ceived 'as profits,' not as rent. It matters not that the parties
christen the contract 'lease,' and its fruit 'rent.' The law looks
through the whole agreement, and finding that the Dalton City Com-
pany are to receive no fruit, unless there be net profits, and only a
stipulated proportion of them, sees therein evidence of a community
of losses and profits, and demoninates it a partnership." Dalton City
Co. v. Dalton Mfg. Co., 33 Ga. 255.

« Grace v. Smith, 2 W. Bl. 998, Burdick's Cases, 45, Mechem's
Cases, 61; Bloxham v. Pell, cited in 2 W. Bl. 999; Leggett v. Hyde,
N. Y. 272, Burdick's Cases, 50; Manhattan Brass & Mfg. Co. v. Sears,
45 N. Y. 797; Cushman v. Bailey, 1 Hill (N. Y.) 526; Parker v. Can-
field, 37 Conn. 250, 9 Am. Rep. 317; Rosenfield v. Haight, 53 Wis.
260, 10 N. W. 378, 40 Am. Rep. 770.

42 in Waugh v. Carver, 2 H. Bl. 235, 2 Smith, Lead. Cas. (9th ed.)
1178, Burdick's Cases, 47, Mechem's Cases, 67, it was admitted by
the court that the agreement in question did not constitute the par-
ties actual partners, but they were both held liable, nevertheless,
for the debt of one of them.

For cases recognizing the distinction between partnership inter se
and partnership as to third persons, see the following cases: Price

ESSENTIAL ELEMENTS. 15

of that fymd upon which the creditor of the trader relic- for
repayment.'1 r' Imt, as has been pointed out, this places the
question of partnership or no partnership upon a false footing,
for creditors do not look to. the profits for security for their,
debts at all, and, indeed,. the existence of profits is. inconsistent
with the existfwp- of dfbt.fi.44

The strictness of the old rule as to profit sharing gave rise
to subtile distinctions between a payment out ofthe profits
and a payment varying w ith_them ; the former bcipfi', hejd to
create a partnership, but ttie latter not.45 This distinction

v. Alexander, 2 G. Greene (Iowa), 427, 52 Am. Dec. 526; Bromley v.
Elliot, 38 N. H. 287; Pitkin v. Pitkin, 7 Conn. 311; Stanckfield v.
Palmer, 4 G. Greene (Iowa), 23; Gill v. Kuhn, 6 Serg. & R. (Pa.)
333; Kellogg v. Griswold, 12 Vt. 291; Brandon v. Conner, 117 Ga.
759, 45 S. E. 371.

43 Grace v. Smith, 2 W. Bl. 998, Burdick's Cases, 45, Mechem's
Cases, 61; Parker v. Canfield, 37 Conn. 250, 9 Am. Rep. 320.

a Lindl. Partn. 26. "Persons held liable as partners to third per-
sons did not take part of the funds upon which creditors relied, any
more than did a salaried agent, and, in fact, less so; for, when a
partnership was unable to pay its debts, it was because there were
no profits, and, in that case, such person took nothing, whereas, if
his compensation had been definite, the fund would have been di-
minished." Bates, Partn. § 15. See, also, Eastman v. Clark, 53 N.
H. 276.

"The ground of the doctrine was that a person who shares the
profits ought to share the losses, because he takes a part of the fund
out of which the losses are to be paid. But the ground will not bear
examination; for, in point of fact, the lossess are no more payable
out of the profits than out of the capital, and in other cases it has
been decided, quite inconsistently with this ground, that it is only
a participation in the net, not the gross, profits, which makes the
participant a quasi-partner. Other grounds, but none more satis-
factory, have been suggested. Indeed, the doctrine, though well re-
ceived by some judges, appears to have been always regarded by
others as an anomaly or legal solecism." Boston & Colorado Smelt-
ing Co. v. Smith, 13 R. I. 31.

^■•Ex parte Hamper, 17 Ves. 403; Grace v. Smith, 2 W. Bl *

Burdick's Cases, 45. .Mechem's Cases. 61. Although a right to share

16 WHAT CONSTITUTES A PARTNERSHIP.

was not universally recognized.46 These subtile distinctions:
have been almost universally swept away, and the whole law
of partnership Liability 1ms been placed upon a sound basis of
principle by modern decisions.

10. Modern Doctrine. — Under the modern doctrine of part-
nership, persons are not liable to third persons as part-
ner's," although they share profits, unless —

(a) They are really partners inter se, or

(b) Have held themselves out as partners under such cir-.
cumstances as to estop them from denying it.

The modem doctrine of partnership dates from the decision
in 1860, by the English house of lords, of the leading case of
Cox v. Hickman.47 In this case, it was decided that persons
who share the profits of a business do not incur the liabilities
of partners, unless that business is carried on by themselves
personally, or by others as their real or ostensible agents.48

in the profits may constitute one a partner, a commission equal to
such share as compensation does not. Edwards v. Tracy, 62 Pa. 374.
In Buckner v. Lee, 8 Ga. 285, Judge Nisbet says: "It is clear, then,
that if one is to receive a certain proportion of profits, as one-third,
or one-half, as profits, he is a partner. If a certain sum is to be paid
out of the profits, and the party does not look to that fund alone for
payment, he is not a partner; but if the sum to be paid is not fixed,
but may be increased or diminished by the amount or accidents of
the business, then the receiver is a partner." Quoted and followed
in Dalton City Co. v. Dalton Mfg. Co., 33 Ga. 254.

•to in Dalton City Co. v. Hawes, 37 Ga. 115, an agreement to pay,
as rent, "a sum equal to one-half of the net profits," was held to
create a partnership. See, also, Parker v. Canfield, 37 Conn. 250,
9 Am. Rep. 320, wherein the court said: "The mere use of the ex-
pression, 'a sum equal to the profits,' in lieu of the word 'profits,'
does not change the nature of the contract."

4" 8 H. L. Cas. 268. See, also, for reports of the same case below,
3 C. B. (N. S.) 523, and 18 C. B. 617.
■43 Beckham v. Drake, 9 Mees. & W. 79; Ernest v. Nicholls, 6 H. L.

ESSENTIAL ELEMENTS. 17

This case has ever since been almost universally followed and
approved.49 It was at once the end of the old theory of part-
nership, and the starting point of a new doctrine. It put art
end to two notions which had theretofore been regarded as
fundamental : "First, that third persons, rnq,y hold to the lia-
bility of partners those who, in fack are not partners, merely
because sume other relation exists between them ; and, second,
that participation in the profits of a business isconclusiye-0-L>
a partnership.""'" It placed partnership liability upon one or
the other of three well-recognized grounds of liability at com-
mon law, viz., personal commission, agency, estoppel, and
tot ally abandoned the rule*, for which no sound principle had
ever been given, that mere profit sharing created a liability to
third persons. Nevertheless, the courts of a few states have
distinctly refused to follow the rule established by Cox v.
Hickman, and still cling to the old rule that a sharing of
profits renders one liable as a partner to third persons, al-
though there is, in fact, no partnership inter se;51 and, in
many recent cases, expressions may be found to the effect that
a partnership may exist as to third persons where there is none
inter se. mmmm

Cas. 400; Wilson v. Whitehead, 10 Mees. & W. 503; Eastman v.
Clark, 53 N. H. 276.

40 See Mollwo v. Court of Wards, L. R. 4 P. C. 419; Pooley v.
Driver, 5 Ch. Div. 450; Home v. Hammond, L. R. 7 Exch. 218. For
American cases, see infra, §§ 12-15.

oo Pars. Partn. § 43; Eastman v. Clark, 53 N. H. 276. "Since_tM&
decision, participaliQ.&_jn profits has ceased to be a conclusive test
fit her of partnership, or of liability as a~pkrtlinr.u — 9-fincTXaws
Eng. p. 455. tit. "Partnership."

bi In New York there is considerable confusion in the decisions
as to what is the true test of partnership. It has been several times
held that Cox v. Hickman has never been acknowledged in New
York, and that Grace v. Smith and Waugh v. Carver are still the
recognized authorities. But, nevertheless, the substantial results of
Cox v. Hickman are apparent in many cases. Leggett v. Hyde, 58
2

IS WHAT CONSTITUTES A PARTNERSHIP.

Tests of Partnership.

II. Various arbitrary tests of partnership have been sug-
gested from time to time, such as —

(a) Profit sharing.

(b) Mut^agencx.

(c) Intention of parties.

Profit Sharing.

It has already been shown that a mere sharing in the profits
of a business is no longer a conclusive test of partnership,

N. Y. 272, Burdick's Cases, 50; Hackett v. Stanley, 115 N. Y. 625, 22
N. E. 745; Cassidy v. Hall, 9 7N. Y. 159; Burnett v. Snyder, 81 N. Y.
550, Mechem's Cases, 125. In Johnson v. Alexander, 95 N. Y. St. Rep.
351, joint proprietorship in the profits is distinctly recognized as the
test of partnership, and yet it is declared that with a few recognized
exceptions, sharing profits renders one liable as a partner to third
persons. The reasoning of Leggett v. Hyde, 58 N. Y. 272, Burdick's
Cases, 50, and Hackett v. Stanley, 115 N. Y. 625, 22 N. E. 745, is
quoted, approved, and followed.

In Pennsylvania, also, we find a deliberate rejection of the rule
in Cox v. Hickman, and the almost universally repudiated rule of
Grace v. Smith and Waugh v. Carver is followed upon the principle
of stare decisis. The inconvenience and injustice of the old rule is,
however, partially modified by certain statutory exceptions. Never-
theless, in cases not falling within these statutory exceptions, profit-
sharing is still the test of partnorhip liability. Wessels v. Weiss,
166 Pa. 490, 31 Atl. 247; Edwards v. Tracy, 62 Pa. 374; Lord v.
Proctor, 7 Phila. (Pa.) 630; Merrall v. Dobbins, 169 Pa. 480, 32 Atl.
578, Burdick's Cases, 86. But in Merrall v. Dobbins, 169 Pa. 487,
32 Atl. 578, Burdick's Cases, 86, the court intimates that the question
of the true rule might still be considered, and held that the "inten-
tion of the parties to become joint owners of the business," showed
conclusively that such persons were partners. So, also, In re Gibb's
Estate, 157 Pa. 59, 27 Atl. 383, the true rule was distinctly recognized.

The principle adopted in some jurisdictions, that a person may re-
ceive a share of the profits of a business by way of salary, or com-
pensation for services, without being held liable as a partner to
third persons, has not been adopted here, and cannot be received

TESTS OF PARTNERSHIP. 19

either as between the parties themselves or as to third persons.
Various illustrations of this rule will be given in a succeeding
section.52

Same — Mutual Agency as a Test.

12. Partners are mutual agents in the conduct of the part-
nership business, but mutual agency is not a test of
partnership.

After the abandonment of profit sharing as a conclusive
test of partnership, the view has sometimes been taken that
Cox v. Hickman substituted mutual agency as a test.53 But,

unless with qualifications that the true character of the agreement
is known, or the apparent relations of the parties are such as should
put parties dealing with them on inquiry. Bromley v. Elliot, 38
N. H. 287. But see the later case of Eastman v. Clark, 53 N. H.
276, which is a leading American case on partnership. See, also,
Cossack v. Burgwyn, 112 N. C. 304, 16 S. E. 900, and Southern Fer-
tilizer Co. v. Reams, 105 N. C. 283, 11 S. E. 467.

52 See post, §§ 14, 15.

ss Shaw v. Gait, 16 Ir. C. L. 357; Eastman v. Clark, 53 N. H. 276;
Lindl. Partn. p. 34. See, also, opinion of Martin, B., in Holme v.
Hammond, L. R. 7 Exch. 218. The element of agency for each other
in and about the business in question is perhaps the most conclusive
evidence of a partnership. Jernee v. Simonson, 58 N. J. Eq. 282, 43
Atl. 370, citing Cox v. Hickman, 8 H. L. Cas. 268, Burdick's Cases, 65,
Mechem's Cases, 70, and Wild v. Davenport, 48 N. J. Law, 135, 7 Atl.
295, Burdick's Cases, 77.

In Harvey v. Childs, 28 Ohio St. 319, Mechem's Cases, 97, it was
held that "participation in the profits of a business, though cogent
evidence of a partnership, is not necessarily decisive of the question.
The evidence must show that the persons taking the profits shared
them as principals in a joint business, in which each has an express
or implied authority to bind the other." On page 231 of this case
it was said: "Although a partnership may be said to rest upon the
idea of a communion of profits, nevertheless the foundation of the
liability of one partner for the acts of another is the relation they
sustain to each other as being each principal and agent." See, also,
Merchants' Nat. Bank v. Standard Wagon Co., 9 Ohio Dec. 384.

20 WHAT CONSTITUTES A PARTNERSHIP.

as has been pointed out in later English cases,54 the referent".'
to agency as a test of partnership was unfortunate and incon-
clusive, inasmuch as agency results from partnership, and not
partnership from ayncy/""' Such a test seems to give a
synonym, rather than a definition — another name for the con-
clusion, rather than a statement of the premises from which
the conclusion is to be drawn. To say that a person is liable
as a partner who stands in the relation of a principal to those
by whom the business is actually carried on adds nothing by
way of precision, for the very idea of partnership includes the
relation of principal and agent.56

64 Pooley v. Driver, 5 Cli. Div. 458. See, also, opinion of Cleasby,
B., and Kelly, C. B., in Holme v. Hammond, L. R. 7 Exch. 21S.

55 Meehan v. Valentine, 145 U. S. 611, Burdick's Cases, 80, Mechem's
Cases, 103. "The case [i. e., Cox v. Hickman] did not offer any
alternative test of a partnership, for the suggestion of the necessity
of an agency is of no assistance in a doubtful case. The agency is
the result of the partnership, not vice versa." Pars. Partn. § 43,
citing opinion of Cleasby, B., in Holme v. Hammond, L. R. 7 Exch.
218, 233. That mutual agency cannot be a test of partnership is ap-
parent from the fact that several persons may be partners because
that is their intention, and yet one or more of them may, by stip-
ulation in the partnership agreement, be deprived of all power to act
for or in conjunction with the other partners, either as principal or
agent. See Holme v. Hammond, L. R. 7 Exch. 218; Pooley v. Driver,
5 Ch. Div. 458.

so Meehan v. Valentine, 145 U. S. 611, Burdick's Cases, 80, Mechem's
Cases, 103. In Pooley v. Driver, 5 Ch. Div. 458, Sir George Jessel,
the master of the rolls, said: "You do not help yourself in the-
slightest degree in arriving at a conclusion by stating that he must
be an agent for the others. It is only stating, in other words, that
he must be a partner, inasmuch as every partnership involves this
kind of agency; or, if you state that he is agent for the others, you
state that he is a partner." See, also, Harvey v. Childs, 28 Ohio St.
319, 22 Am. Rep. 387, Mechem's Cases, 97.

TESTS OF PARTNERSHIP. 21

Same — Intention the Real Test.

13. The intention of the parties, as gathered from a con-
struction of the contract they have made, is the real test
of the existence of a partnership.

As has been seen, the distinction between partnerships inter
se and partnerships as f,p third persons is no longer recognized.
Except in the single case of estoppel by holding out, partner-
ship liability depends upon the actual existence of a partner-
ship inter se. Kow, since partnership is a relation arising
out of a particular kind of contract, it would seem to be obvi-
ous that the existence of the relation depends exclusively upon
the intention of the parties to enter into that particular kind
of a contract, for all contracts are construed according to the
manifest intent of the parties. Accordingly, although intent
was not formerly recognized as a test of partnership,57 it is
now well established that the fundamental rule to be observed
in determining the existence of a partnership is that regard
must be paid to the true contract and intention of the parties,
as appearing from all the facts of the case.58 But if a parti

5- See ante, § 9. See, also, Bromley v. Elliot, 38 N. H. 287.

G8 Cox v. Hickman, 8 H. L. Cas. 268, Burdick's Cases, 65, Mecheni's
Cases, 70; Mollwo v. Court of Wards, L. R. 4 P. C. 419; Badeley v.
Consolidated Bank, 38 Ch. Div. 258; Webster v. Clark, 34 Fla. 637,
16 So. 601; Bradley v. Ely, 24 Ind. App. 2, 56 N. E. 44; Niehoff v.
Dudley, 40 111. 406; Stevens v. Faucet, 24 111. 483; Beecher v. Bush,
45 Mich. 188, 7 N. W. 785, Mechem's Cases, 86, 40 Am. Rep. 465; Polk
v. Buchanan, 5 Sneed (Tenn.) 721, Burdick's Cases, 62; A. N. Kel-
logg Newspaper Co. v. Farrell, 88 Mo. 594; Linter v. Millikin, 47 111.
178; Salter v. Ham, 31 N. Y. 321; Gray v. Gibson, 6 Mich. 300; Jernee
v. Simonson, 58 N. J. Eq. 282, 43 Atl. 370; Central City Sav. Bank
v. Walker, 66 N. Y. 431; Hay ward v. Barron, 19 N. Y. Supp. 384;
Earle v. Art. Library Pub. Co., 95 Fed. 548; National Surety Co. v.
T. B. Townsend Brick & Contracting Co., 176 111. 156, 52 N. E. 938;
Cannon v. Brush Elec. Co., 96 Md. 446, 54 Atl. 121, 94 Am. St. Rep.

XT'

22 WHAT CONSTITUTES A PARTNERSHIP.

nership is the legal result of the agreement actually made, the
parties thereto will be partners, though they have intended to
avoid this consequence, or even where they have expressly
stipulated that they arc not to be partners.50 This may be

584. Partnership is a fact depending upon agreement, and not a
mere matter of legal imputation, and the only case in which a per-
son who is sought to be charged as a partner is preclued from prov-
ing the actual fact is when he has held himself out, or permitted
himself to be held out, as a partner. Boston & Colorado Smelting
Co. v. Smith, 13 R. I. 34. As between themselves, though not at to
third persons, the intent was controlling, even under the old doc-
trine as to partnership. See Wright v. Taylor, 9 Wend. (N. Y.) 538;
Ex parte Hamper, 17 Ves. 403; Kerr v. Potter, 6 Gill (Md.) 404;
Culley v. Edwards, 44 Ark. 428. In Hazard v. Hazard, 1 Story, 374,
Judge Story said that, as to third persons, a partnership might arise
by operation of law against the intention of the parties, but that a
partnership inter se exists only when such is the actual intention of
the parties.

so Pooley v. Driver, 5 Ch. Div. 458; Ex parte Delhasse, 7 Ch. Div.
511; Adam v. Newbigging, L. R. 13 App. Cas. 315; Davis v. Davis
(1894), 1 Ch. Div. 393; Burdick's Cases, 12; Beecher v. Bush, 45
Mich. 188, 7 N. W. 785; Mechem's Cases, 86, 40 Am. Rep. 465; Leg-
gett v. Hyde, 58 N. Y. 272, Burdick's Cases, 50; Chapman v. Hughes,
37 Pac. 1048, 38 Pac. 109, 104 Cal. 302; Duryea v. Whitcomb, 31 Vt.
395, Mechem's Cases, 57; Bigelow v. Elliot, 1 Cliff. 28, Fed. Cas.
No. 1,399; Manhattan Brass & Mfg. Co. v. Sears, 45 N. Y. 797, 6 Am.
Rep. 177; Rosenfield v. Haight, 53 Wis. 260, 10 N. W. 378; Huggins
v. Huggins, 117 Ga. 151, 43 S. E. 759; City Nat. Bank v. Stone, 131
Mich. 588, 92 N. W. 99; Mulhall v. Cheatham, 1 Mo. App. 476; Bos-
ton & Colorado Smelting Co. v. Smith, 13 R. I. 31; Wehrman v. Mc-
Farlan, 9 Ohio Dec. 402. "The intention is ascertained from the
whole of the contract, — from the actual relations it creates, — and not
from the fact that the parties denominate it a partnership, or may
declare that a partnership is not intended." Bestor v. Barker, 106
Ala. 240, 17 So. 389.

In Adam v. Newbigging, L. R. 13 App. Cas. 316, the court said:
"The draftsman apparently looked at all the cases, beginning at
Waugh v. Carver, 2 H. Bl. 235; 1 Smith, Lead. Cas. (9th Ed.) 877,
Burdick's Cases, 47, and ran through them all, including Pooley v.
Driver, 5 Ch. Div. 458; Mollwo v. Court of Wards, L. R. 4 P. C. 419;
Ex parte Delhasse, 7 Ch. Div. 511, and Ex parte Tennant, 6 Ch. Div.
303, and cleverly strives to avoid the effect of each test discussed

TESTS OF PARTNERSHIP. 23

thought to violate the rule that the inteut is controlling,60 but
it does not. The intent which is controlling is the intent to do
those things which the law has declared constitute a partner-
ship. If the parties intend and do those things which the
laws says constitute a partnership, then theparties are ipso,
facto partncis, and an express stipulation that they do not in-
tend to form a partnership simply shows that they have mis-
taken the legal effect of the agreement which they intended to
make.61 If the parties make an agreement which is a part-
in these cases by something which should have the same effect, but
which should avoid the specific test. I wish to say every such ex-
pedient would be absolutely void in the view I take of the law."

co In London Assur. Co. v. Drennen, 116 U. S. 461, it was said that,
as between the parties themselves the letter of the agreement con-
trols. In Sailors v. Nixon-Jones Printing Co., 20 111. App. 509, the
court said: "A partnership inter se must result from the intention
of the parties as expressed in the contract, and they can not be
made to assume toward each other a relation which they have ex-
pressly contracted not to assume. The terms of the agreement,
where there is one, fixes the real status of the parties toward each
other." If parties associated in business in such a manner as to
make them partners with respect to third persons expressly agree
that a partnership shall not exist, they are not partners as between
themselves. Gill v. Kuhn, 6 Serg. & R. (Pa.) 332. See, also, Kerr
v. Potter, 6 Gill (Md.) 404.

ci Bradley v. Ely, 24 Ind. App. 2, 56 N. E. 44, citing, with approval,
George, Partn. p. 31. In Pooley v. Driver, 5 Ch. Div. 458, an agree-
ment very carefully drawn, with the intention of excluding any in-
ference of a partnership between the contracting parties was held,
nevertheless, to create a partnership. The court said (page 483) :
"What they did not intend was to incur the liability of partners.
If intending to be a partner is intending to take the profits, then
they did intend to be partners. If intending to take the profits, and
have the business carried on for their benefit, was intending to be
partners, they did intend to be partners. If intending to see that
the money was applied for that purpose, and for no other, and to
exercise an efficient control over it, so that they might have brought
an action to restrain it from being otherwise applied, and so forth,
was intending to be partners, then they did intend to be partners."

"The real inquiry always is, have the parties by their contract,

04 WHAT CONSTITUTES A PARTNERSHIP.

nership in fact, it is of no importance that they call it some-
thing else. Names go for nothing when the substance of the
arrangement shows them to be inapplicable.62 Persons may
become partners without their knowing it; the relation result-
ing from the terms tkey liave used in the contract, or from
the nature of the undertaking.03 On the other hand, even if

combined their property, labor or skill in an enterprise or business,
as principals, for the purpose of joint profit? If they have done so,
they are partners in that business or enterprise, no matter how
earnestly they may protest they are not, or how distant the forma-
tion of a partnership was from their minds. The terms of their
contract given, the law steps in and declares what their relations
are to the enterprise or business, and to each other." Spaulding v.
Stubbings, 86 Wis. 255, 56 N. W. 469, Mechem's Cases, 117. See,
also, Jones v. Davies, 60 Kan. 309, 56 Pac. 484.

62 Per Cooley, J., in Beecher v. Bush, 45 Mich. 1S8, 7 N. W. 785, 40
Am. Rep. 465, Mechem's Cases, 86, quoted with approval in Webster
v. Clark, 34 Fla. 637, 16 So. 601. "The intent of the parties must
be ascertained from the legal effect of the instrument, and not the
names employed by the parties." Van Kuren v. Trenton L. & M.
Mfg. Co., 13 N. J. Eq. 306. "Persons may become copartners, with-
out a special agreement for the purpose, by virtue of the effect
which the law gives to an undertaking for the use of a common
capital, with division of profits and losses, in continuous transac-
tions, though carried on in an incidental manner. Therefore, if the
plaintiff, without a special or express agreement to form a partner-
ship, contributed a fund to be invested, as occasion offered, in notes,
stocks, and the like, and agreed to share the gains and losses there-
of between them, they thereby became partners in the view of the
law, and the court properly instructed the jury to that effect, as
requested by the plaintiffs." Robinson v. Parker, 11 App. Cas.
(D. C.) 140.

as Lintner v. Millikin, 47 111. 181. It is immaterial that the par-
ties are not aware of the legal consequences of their acts. Such
consequences attach, nevertheless. Mulhall v. Cheatham, 1 Mo. App.
481. In Chapman v. Hughes, 104 Cal. 304, 37 Pac. 1048, 37 Pac. 109,
the court said: "Whether the parties knew they were partners or
not, they certainly intended and contracted to do all that in law is
necessary to create a partnership. The relation of partnership may
be established, although the parties may not expressly intend to
create such relationship."

TESTS OF PARTNERSHIP. 25

the parties intend to be partners, and so expressly stipulate,
yet, if they so frame the terms and provisions of their con-
tract as to leave them without any community of interest in
the business or profits, they are not partners in fact or in
law.64 Of course, in a doubtful case, the expressed intent may
be sufficient to turn the scales one way or the other,05 and, if
the expressed intent is not inconsistent with the other terms of
the contract, it will be controlling.66 Where the rights of
third person* are not involved, the contract will be liberally

I --• ■■■■ ■ - - --■ -T-ifo c - — mm— iiunjiwuniiwuMWiTTr m trr-

construed, so as to effectuate the actual understanding of the
parties, and the purposes they had in view.67 \l

m Sailors v. Nixon-Jones Printing Co., 20 111. App. 509, Mechem's
-Cases, 53; McDonald v. Matney, 82 Mo. 358, 366; Dwinel v. Stone,
30 Me. 384, Burdick's Cases, 17; Livingston v. Lynch, 4 Johns. Ch.
(N. Y.) 573, 592; Burnett v. Snyder, 76 N. Y. 344; Van Kuren v.
Trenton L. & M. Mfg. Co., 13 N. J. Eq. 302, 306; Ryder v. Wilcox, 103
Mass. 24, Burdick's Cases, 525; Oliver v. Gray, 4 Ark. 425, Burdick's
Cases, 16; Hayward v. Barron, 19 N. Y. Supp. 384.

es " A clause negativing a partnership may throw light on other
clauses, and rebut inferences which might be drawn from them
alone." Lindl. Partn. p. 11. "Every doubtful case must be solved
in favor of their intent; otherwise, we should carry the doctrine of
constructive partnership so far as to render it a trap to the unwary."
Beecher v. Bush, 45 Mich. 188, 7 N. W. 785, 40 Am. Rep. 465,
Mechem's Cases, 86, citing Kent, C. J., in Post v. Kimberly, 9 Johns.
(N. Y.) 504.

ee Gill v. Kuhn, 6 Serg. & R. (Pa.) 333; Kerr v. Potter, 6 Gill
(Md.) 404; Smith v. Walker, 57 Mich. 456, 22 N. W. 267, 24 N. W.
830, 26 N. W. 783; Runnels v. Moffat, 73 Mich. 188, 41 N. W. 224;
Reddington v. Lanahan, 59 Md. 429; Paul v. Cullum, 132 U. S. 539,
551; Pillsbury v. Pillsbury, 20 N. H. 90. An agreement which pur-
ports on its face to be a copartnership agreement, and which pro-
vides that the parties thereto shall share equally in expenses, losses,
and gains, cannot be treated as a mere contract of employment.
Smith v. Walker, 57 Mich. 456, 22 N. W. 267, 24 N. W. 830, 26 N. W.
783.

«17 Am. & Eng. Enc. Law (1st ed.), p. 834, citing Stevens v.
Gainesville Nat. Bank, 62 Tex. 499; Hitchings v. Ellis, 12 Gray
(Mass.) 452; Couch v. Woodruff, 63 Ala. 466; Tayloe v. Bush, 75 Ala.
432.

26 WHAT CONSTITUTES A PARTNERSHIP.

Same — What Must be Intended — Common Ownership

of Profits.

14. Where the intention of the parties to a contract is to
carry on a business, and share the profits between them
as common owners, a partnership is created.-

15. Where the intention is not to share the profits as com-
mon owners, but as a personal debt due from some of
the associates to the others, the amount of which is
measured by the profits, no partnership is created.

The ultimate and conclusive test of a partnership is cq-

owiievship of the profits u£ q business. GS ''Where ;i part of
the profits themselves is the property of the party, he is a
partner. Where their amount merely ascertains the amount
of a debt or duty, hut they themselves do not belong to the
party, there is not a partnership." C9 "If there is a commun-
es Bradley v. Ely, 24 Ind. App. 2, 56 N. E. 44, 79 Am. St. Rep. 251;
Le Fevre v. Castagnio, 5 Colo. 564. See, also, cases cited in the suc-
ceeding part of this section in illustration of the rule. "One essential
element of a partnership is a community of interest in the subject-
matter of it. Tenet totum in communi et nihil separatim per se, has
been the keystone of the arch since the days of Bracton. From this
arises the right of each partner to make contracts, incur liabilities,
manage the whole business, and dispose of the whole property of
the partnership, for its purposes, in the same manner and with the
same power, as all the partners could when acting together." Dwinel
v. Stone, 30 Me. 384, Burdick's Cases, 17. But it must be noted in
this connection, that "the subject-matter" of a partnership may be
merely the profits. It is not necessary that there should be a com-
munity of interest in the property or capital employed to earn the
profits. See infra, § 22.

go Per Henderson, C. J., in Cox v. Delano, 3 Dev. (N. C.) 90. It
should be noted that this happy and accurate statement of the one
essential element of a partnership was made in 1831, nearly thirty
years before the decision of the celebrated case of Cox v. Hickman.
See, also, to the same effect, Waggoner v. First Nat. Bank, 43 Neb.

gft, C»"*WA*** #•"*•* h^^ ~"

TESTS OF PARTNERSHIP. 27

ity of profits, a partnership follows. Community of profits
means a proprietorship in them, as distinguished from a per-
sonal claim upon the other associates. In other words, a
property right in them from the start, in one associate as much
as in the other." 70 Where there is such a community of

84, 61 N. W. 112; Webster v. Clark, 34 Fla. 637, 16 So. 601; Meehan
v. Valentine, 145 U. S. 611, Burdick's Cases, 80, Mechem's Cases, 103;
Jones v. Davies, 60 Kan. 309, 56 Pac. 484; Palliser v. Erhardt (Sup.),
61 N. Y. 192; Oppenheimer v. Clemmons, 18 Fed. 888. "Whether a
man is a partner or not depends upon the nature of his interest in
the profits. ... If his interest is that of owner, then he is a
partner; otherwise not." Wheeler v. Farmer, 38 Cal. 205.

"A person may be allowed, in special cases, to receive part of the
profits of a business, without become a legal or responsible partner,
where the whole evidence leads to the conclusion that the receiver
of the money took it only as wages, or specific compensation or pay-
ment, and did not intend to acquire any interest in, or control over,
the business, or in the profits as they accrue, and before they are
ascertained and divided, but only after they^were ascertained to find
in them the fund, and in this amount the measure of his payment."
Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 838.

The statement met with in the cases both before and since Cox v.
Hickman, that a person must be interested in the profits "as profits,"
is a recognition of the true rule. In Grace v. Smith, 2 W. Bl. 998,
Burdick's Cases, 45, Mechem's Cases, 61, which is the very fountain
head of the profit-sharing rule, the distinction between sharing
profits as profits (i. e., sharing them as proprietors), and merely re-
lying upon profits as a fund for payment, is distinctly recognized.
The long line of cases holding that any sharing of profits was suffi-
cient to make one liable as a partner finds but little support in this-
case. "Interest in profits does not necessarily make a person a part-
ner, or liable as a partner. Pars. Partn. 67. To have that effect,
it must be, as the books express it, an interest in profits as profits —
a proprietary interest, or as Mr. Justice Clifford says, in Berthold
v. Goldsmith, 24 How. (U. S.) 537, 'the party must be in some way
interested in the profits as principal.' Or, as expressed in Harvey v.
Childs, 28 Ohio St. 319, 'the evidence must show that the persons tak-
ing the profits shared them as principals in a joint business, in which
each has an express or implied authority to bind the others. Le
Fevre v. Castagnio, 5 Colo. 571.

to Bradley v. Ely, 24 Ind. App. 2, 56 N. E. 44, quoting, with ap-

2S WHAT CONSTITUTES A PARTNERSHIP.

ownership in the profits, the parties are aecessarily mutual
principals and agents in carrying on the business, and earning
the profits, and, as lias been -ecu, Buch a relation is a synonym
of partnership.71

The rule here staled is clear enough. The difficulty is in
its application. The true intention of the parties, as appear-
ing from all the facts and circumstances of the case, is con-
trolling. If, so construed, the contract manifests an intention
to he joint owners of the profits, it constitutes a partnership;
otherwise not. This intention is no longer ascertained by the
application of any arbitrary tests.72 It is obviously almost
impossible to define accurately what are the states or circum-
stances which establish the intention to be partners, or mutual
agents. Capital embarked, powers of interference in the
business, profits received, etc., arc all circumstances to be
taken into consideration in deciding the question.73

proval, George, Partn. p. 50. And see Gulf City Shingling Co. v.
Boyles, 129 Ala. 192, 29 So. 800.

71 See George, Partn., p. 52.

" Beecher v. Bush, 45 Mich. 188, 7 N. W. 785, Mechem's Cases, 86,
wherein Cooley, J., said: "So far as the notion ever took hold of the
judicial mind that the question of partnership or no partnership was
to be settled by arbitrary tests, it was erroneous and mischievous,
and the proper corrective has been applied." See, also, Eastman v.
Clark, 53 N. H. 276, wherein the results of Cox v. Hickman, supra,
are discussed in an elaborate opinion, reviewing many cases. As
between the parties, the question of the existence of a partnership
relation is one of intention, to be gathered from all the facts and
circumstances. National Surety Co. v. T. B. Townsend Brick & Con-
tracting Co., 176 111. 156, 52 N. E. 938. Where there is no written
agreement between the parties, their intention may be inferred from
their course of conduct, and admissions with respect to the business
carried on. Earle v. Art Library Pub. Co., 95 Fed. 548.

"3 Parker v. Canfield, 37 Conn. 250; Ex parte Tennant, 6 Ch. Div.
315; Waggoner v. First Nat. Bank, 43 Neb. 84, 61 N. W. 112. See,
also, infra, § 16, "Sharing Profits as Evidence of Intention;" and
infra, § 22, "Common Stock or Capital." A lender does not become
a partner by taking profits instead of interest for his loan, where he

.. TESTS OF PARTNERSHIP. 29

Under the rule here stated, persons sharing the profits of a
business under the following circumstances have been held not
to be partners by reason of such participation in the profits,
viz. : A creditor receiving payment of his_debt by instalments,
or othe^wj.se, out of the profits of a business.; 74 a servant or
agent employed in the business, and remunerated by a share
of the pmiils in lieu uf salary; '"' a | widow or child of a de-
relinquishes the money to the borrower, and does not retain control
over it in the partnership business. Ellison v. Stuart, 2 Pen. (Del.)
179, 43 Atl. 836. The best evidence of the existence of a partnership
is the contract creating it. If proof of the contract is not within
reach, its existence may be inferred (1) from proof of contribution
to the partnership stock; (2) from participation in profits; and
(3) from the acts and declarations of the parties sought to be
charged. In re Gibb's Estate, 157 Pa. 59, 27 Atl. 383.

"Where the suit is between the parties as partners, stricter proof
is required of the existence of the partnership, than where the ac-
tion is by a third person against either actual partners, or persons
sought to be charged as partners, inasmuch as the latter are more
likely to know the means whereby the fact of partnership may be
proved than such third persons." Ellison v. Stuart, 2 Pen. (Del.),
43 Atl. 838.

~* Cox v. Hickman, 8 H. L. Cas. 268, Burdick's Cases, 65, Mechem's
Cases, 70.

-o Stafford v. Sibley, 106 Ala. 189, 17 So. 324; Randle v. State, 49
Ala. 14; Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 838; Wheeler v.
Farmer, 38 Cal. 203; Thornton v. McDonald, 108 Ga. 3, 33 S. E. 680;
Le Fevre v. Castagnio, 5 Colo. 564; Loomis v. Marshall, 12 Conn. 70;
Parker v. Canfield, 37 Conn. 250; Vinson v. Beveridge, 3 MacArthur
(D. C.) 597; Podgett v. Ford, 117 Ga. 508; Niehoff v. Dudley, 40 111.
406; Parker v. Fergus, 43 111. 437; Mayfield v. Turner, 180 111. 332,
54 N. E. 418; Burton v. Goodspeed, 69 111. 327; National Surety Co.
v. T. B. Townsend Brick & Contracting Co., 176 111. 156, 52 N. E. 938;
Pierpont v. Lanphere, 104 111. App. 232; Ellsworth v. Pomeroy, 26
Ind. 158; Price v. Alexander, 2 G. Greene (Iowa) 427, 52 Am. Dec.
526; Holbrook v. Oberne, 56 Iowa, 324, 9 N. W. 291; Porter v. Cur-
tis, 96 Iowa, 539, 65 N. W. 824; Johnson v. Carter, 120 Iowa, 355,
94 N. W. 850; Shepard v. Pratt, 16 Kan. 209; Donley v. Hall, 5 Bush
(Ky.) 549; Holden v. French, 68 Me. 241; Kerr v. Potter, 6 Gill'
(Md.) 404; Sangston v. Hack, 52 Md. 173; Reddington v. Lanahan,
59 Md. 429; Whiting v. Leakin, 66 Md. 255, 7 Atl. 688; Rowland v.

30 WHAT CONSTITUTES A PARTNERSHIP.

ceased partner receiving, by way of annuity, a portion of the
nroiit.s: 7i; ;i person who lias loaned money to another engaged,
or about to engage, in business, on a contract with him that

Long, 45 Md. 439; Taylor v. Terme, 3 Harr. & J. (Md.) 505; Holmes v.
Old Colony R. Co., 5 Gray (Mass.) 58; Com. v. Bennett, 118 Mass.
443; Morrow v. Murphy, 120 Mich. 204, 79 N. W. 193, 80 N. W. 255;
Morrison v. Cole, 30 Mich. 102; Stockman v. Michell, 109 Mich. 348,
67 N. W. 336; Waggoner v. First Nat. Bank, 43 Neb. 84, 61 N. W.
112; Day v. Stevens, 88 N. C. 83; Mauney v. Coit, 86 N. C. 463; New-
man v. Bean, 21 N. H. 93; Eastman v. Clark, 53 N. H. 276; Stone v.
West Jersey Ice Mfg. Co., 65 N. J. Law, 20, 46 Atl. 696; Mason v.
Hackett, 4 Nev. 420; Richardson v. Hughitt, 76 N. Y. 55; Prouty v.
Swift, 51 N. Y. 594; Leggett v. Hyde, 58 N. Y. 272, Burdick's Cases,
50; Cassidy v. Hall, 97 N. Y. 159; Hayward v. Barron (Com. PL),
19 N. Y. Supp. 383; Winne v. Brundage (Sup.), 40 N. Y. Supp. 225;
Hunt v. McCabe, 40 Misc. (N. Y.) 461; McArthur v. Ladd, 5 Ohio,
514; Boston & Colorado Smelting Co. v. Smith, 13 R. I. 31; State v.
Hunt (R. I.), 54 Atl. 937; Chapman v. Lipscomb, 18 S. C. 233; Polk
v. Buchanan, 5 Sneed (Tenn.) 721, Burdick's Cases, 62; Buzard v.
First Nat. Bank, 67 Tex. 83; Tex. & Pac. R. Co. v. Smissen, 31 Tex.
Civ. App. 549, 73 S. W. 42; La Flex v. Bursa, 77 Wis. 538, 46 N. W.
801; Sohns v. Sloteman, 85 Wis. 113, 55 N. W. 158; Bigelow v. Elliot,
1 Cliff. 28, Fed. Cas. No. 1,399; Ross v. Parkyns, L. R. 20 Eq. 331;
Rawlinson v. Clarke, 15 Mees. & W. 292; In re Gibb's Estate, 157 Pa.
59, 27 Atl. 383. Compare Hackett v. Stanley, 115 N. Y. 625, 22 N. E.
745, Burdick's Cases, 57. Contra, Miller v. Hughes, 1 A. K. Marsh.
(Ky.) 181; Taylor v. Terme, 3 Har. & J. (Md.) 506, overruled in
Whiting v. Leakin, 66 Md. 255, 7 Atl. 688.

"The legal rule, that accepting a percentage of profits in compen-
sation for services does not create a copartnership, is so well settled
that it is scarcely necessary to repeat it here." Hayward v. Barron
(Com. PL), 19 N. Y. Supp. 384, citing Cassidy v. Hall, 97 N. Y. 159;
Conklin v. Tuthill, 10 N. Y. St. Rep. 624; Richardson v. Hughitt, 76
N. Y. 58; Salter v. Ham, 31 N. Y. 321; Curry v. Fowler, 87 N. Y. 33;
Burnett v. Snyder, 76 N. Y. 344; Edwards v. Dooley, 13 N. Y. St. Rep.
602; De Cordova v. Powter, 8 N. Y. St. Rep. 431; Adams v. Morrison,
113 N. Y. 152, 20 N. E. 829; Burckle v. Eckhart, 3 N. Y. 138; Eager

"«Waugh v. Carver, 2 H. Bl. 235, Burdick's Cases, 47, Mechem's
Cases, 67; Jones v. Walker, 103 U. S. 444, Mechem's Cases, 391;
Philips v. Samuel, 76 Mo. 657. See, also, Pitkin v. Pitkin, 7 Conn.
307.

TESTS OF PARTNERSHIP. 31

the lender shall receive a rate of interest varying with the
profits, or a portion of the profits of the business, in lieu of
interest ; 77 a person receiving a share of profits in lieu of rent

v. Crawford, 76 N. Y. 97. That the amount of one's compensation is
uncertain, and depends upon the various contingencies of the busi-
ness, does not make him any the less an agent. Newman v. Bean,
21 N. H. 93. "The law allowing agents to receive shares of profits as
compensation for services is based upon grounds of public policy,
because it constitutes an incentive to extra exertion, and does not
infringe upon the rights of creditors, or the rules of public policy;
since, if there are profits, the creditors get their pay, and are sat-
isfied, and, if there are no profits, the agents get nothing." Parker
v. Canfield, 37 Conn. 257. See, also, Loomis v. Marshall, 12 Conn. 69.

In Pennsylvania it is provided by statute that individuals and cor-
porations may share profits with employees in lieu of wages, with-
out creating a partnership either inter se or as to third persons.
Pep. & L. Pa. Dig. tit. "Partnership," § 17. See, also, Edwards v.
Tracy, 62 Pa. 374; Dale v. Pierce, 85 Pa. 474.

77 in re Young [1896], 2 Q. B. Div. 484; Cassidy v. Hall, 97 N. Y.
159; Meehan v. Valentine, 145 U. S. 611, Burdick's Cases, 80,
Mechem's Cases, 103; Thillman v. Benton, 82 Md. 64, 33 Atl. 485,
Burdick's Cases, 85; Leggett v. Hyde, 58 N. Y. 272, Burdick's Cases,
50; Richardson v. Hughitt, 76 N. Y. 55; Curry v. Fowler, 87 N. Y. 33;
Jones v. Walker, 103 U. S. 444, Mechem's Cases, 391; Grace v. Smith,
2 H. Bl. 998, Burdick's Cases, 45; Boston & Colorado Smelting Co. v.
Smith, 13 R. I. 27; Culley v. Edwards, 44 Ark. 423; Niehoff v. Dudley,
40 111. 406; Smith v. Vanderburg, 46 111. 34; Lintner v. Millikin, 47
111. 178; Cadenasso v. Antonelle, 127 Cal. 382, 59 Pac. 765; Hunter
v. Conrad, 18 Mont. 177, 44 Pac. 523; Ellison v. Stuart, 2 Pen. (Del.)
179, 43 Atl. 838; Palliser v. Erhardt, 46 App. Div. 222, 61 N. Y. Supp.
191; Waggoner v. First Nat. Bank, 43 Neb. 84, 61 N. W. 112; Sheri-
dan v. Medara, 10 N. J. Eq. 477; Jernee v. Simonson, 58 N. J. Eq.
282, 43 Atl. 373. But see Hackett v. Stanley, 115 N. Y. 625, 22 N. E.
745, Burdick's Cases, 57.

"It [i. e., the profit-sharing rule] was soon relaxed in favor of
agents or servants, who, it was held, might take a share of profits by
way of compensation for their services without becoming quasi-part-
ners. The English courts, however, refused to extend the exception
to cover a loan of money, though, upon principle, it is impossible to
discern any difference whether a portion of the profits goes to pay
for services or for money contributed to the business. Mr. Lindley,
in his excellent work on "Partnership," suggests that this difference

WHAT CONSTITUTES A PARTNERSHIP.

for the use of property, either real or personal.78 This enu-
meration of applications is illustrative only, l>ut it is believed
that no modern ease presents an inconsistent application.

of decision was owing to the statutes against usury, because, in
many cases, a loan of money for a share of profits could only be up-
hold by regarding the lender as a partner." Boston & Colorado
Smelting Co. v. Smith. 13 R. I. 31, citing Lindl. Partn. (3d ed.)
23 25. [f a party is to receive profits in consideration of furnishing
capital, he is clearly a partner; and he is a partner as to third per-
sons, even though it should be stipulated that the capital so fur-
nished should be regarded as a loan, and the party furnishing it a
mere creditor. Parker v. Canfield, 37 Conn. 250. But see Eastman
v. Clark, 53 N. H. 276.

In Pennsylvania, it is provided by statute that a share of profits
may be taken in lieu of interest without creating a partnership, ex-
cept so far as the money loaned is concerned, provided the agreement
is in writing. If the agreement is not in writing, the lender will be
liable as a partner to third persons. Wessels v. Weiss, 166 Pa. 490,
31 Atl. 247; Hart v. Kelley, 83 Pa. 286; Eshleman v. Harnish, 76 Pa.
97; Irwin v. Bidwell. 72 Pa. 244.

-sHawley v. Dixon, 7 U. C. Q. B. 218; Great Western Ry. Co. v.
Preston & B. Ry. Co., 17 U. C. Q. B. 477; McDonnell v. Battle House
Co., 67 Ala. 90; Quackenbush v. Sawyer, 54 Cal. 439, Burdick's Cases,
25; Smith v. Vanderburg, 46 111. 34; Parker v. Fergus, 43 111. 437;
Keiser v. State, 58 Ind. 379; Reed v. Murphy, 2 G. Greene (Iowa)
574; Thompson v. Snow, 4 Me. 264; Bridges v. Wm. C. Sprague &
Pembroke Iron Co., 57 Me. 543; La Mont v. Fullam, 133 Mass. 583;
Holmes v. Old Colony R. Co., 5 Gray (Mass.) 58; Beecher v. Bush,
4." .Mich. 188, 7 N. W. 785, Mechem's Cases, 86; Thayer v. Augustine,
".-, Mich. 187, 20 N. W. 898; A. N. Kellogg Newspaper Co. v. Farrell,
88 Mo. 594; Perrine v. Hankinson, 11 N. J. Law, 181; Heimstreet v.
Howland, 5 Denio (N. Y.) 68; Dake v. Butler, 7 Misc. Rep. (N. Y.)
302; Johnson v. Miller, 16 Ohio, 431; Brown v. Jaquette, 94 Pa. 113;
Felton v. Deall, 22 Vt. 170; Tobias v. Blin, 21 Vt. 544; Garrett v. Re-
publican Pub. Co., 61 Neb. 541, 85 N. W. 537. Contra, Adams v. Car-
ter, 53 Ga. 160; Holifield v. White, 52 Ga. 567.

•In Holmes v. Old Colony R. Co., 5 Gray (Mass.) 58, it was held
that a railroad corporation, by leasing a house owned by it to a party
to be run as a hotel, the lessee to pay a certain sum annually, and
half the net proceeds arising from keeping the house, and keep an
account open for inspection by the corporation, and have free pas-
sage over the railroad for himself and all persons employed and all

TESTS OF PARTNERSHIP. , 33

Statutory Provisions.

In several jurisdictions, statutes exist expressly declaring,
that persons who share the profits of a business under one of
more of the circumstances just enumerated are not, for that
reason alone, partners.79 But in jurisdictions where the re-
articles used in carrying on the hotel, did not thereby become a part-
ner in the hotel business. The mere leasing of a hotel for a certain
part of the net profits will not make the lessor a partner in the hotel
business. This was decided in Beecher v. Bush, 45 Mich. 188, 7 N.
W. 785. Nor does the renting of a building for a saloon, under an
agreement to take half of the profits made out of the business done
therein as rent, make the renter a partner in the business. Thayer
v. Augustine, 55 Mich. 187, 20 N. W. 898. In another case, the plaint-
iff contributed towards the business his manufactory, shops, tools,
implements, and machinery, and the land upon which they were
situated. The defendants were to furnish a certain sum as capital,
and labor to carry on the business. Defendants were to account to
the plaintiff, at reasonable periods, for the proceeds of the business,
or the profits thereof, and all daily transactions were to be entered
on the books, to which plaintiff was to have excess, and at stated
periods an account was to be taken of the profits, which, after de-
ducting the costs and expenses of running the works, and certain
expenses, were to be divided between the parties. It was held that
there was a community interest in the capital to carry on the busi-
ness, and also a community of interest in the profits, and a partner-
ship was thereby created. Wood v. Beath, 23 Wis. 254." Webster
v. Clark, 34 Fla. 649, 16 So. 601. See, also, May v. International
Loan & Trust Co., 34 C. C. A. 448.

to In Pennsylvania, the statute provides that a person lending
money, and receiving a share of the profits in lieu of interest, shall
not be liable to third persons as a partner, except as to the money
so loaned, provided the agreement is in writing, and he does not hold
himself out as a partner, or induce credit to be given to the firm.
It is also provided that an employee taking a share of profits in lieu
of wages does not thereby become a partner, either really or as to
third persons. Pep. & L. Pa. Dig. tit. "Partnership," §§ 16, 17. As
Cox v. Hickman is not recognized in Pennsylvania, these statutes
must be substantially complied with, or partnership liability will
result.

In North Carolina, the statute provides that lessor of property, re-
3

34 W 1 1 AT ( < >NSTITUTES A PARTNERSHIP.

suits of Cox v. Hickman haw been fully adopted, such stat-
rould seem to be bo far merely declaratory of the com-
mon Law.80

Swii Sn \i.i\o Profits and Losses as Evidence of In-
tention.

16. This subject can be conveniently considered under the
following heads:

(a) Sharing both profits and losses.

(b) Sharing profits, with nothing said about losses.

(c) Sharing profits, with stipulation against losses.

(d) Sharing gross returns.

(e) Sharing losses only.

17. Sharing Both Profits and Losses. — An agreement to
share both the profits and the losses of a business"!?
prima facie, but not conclusive, evidence of a partner-
ship.

An agreement to share both the profits and losses of a busi-
ness may be said to be the type of a partnership contract.
Such an agreement has been thought to be conclusive evidence

ceiving a share of profits in lieu of rent, is not liable as a partner of
the lessee. Code N. C, § 1744.

In England, some of the more common cases were specially pro-
vided for by Bovill's Act (28 & 29 Vict. c. 86), which, though re-
pealed, is substantially re-enacted by the partnership act of 1890
(53 & 54 Vict. c. 39). By the latter act it is provided that persons
■sharing profits of a business under the circumstances which havo
been enumerated in the text do not, by reason only of such partici-
pation in profits, become partners in the business, or liable as such.
Sellers of good will, and lenders of money, are, however, postponed
to other creditors in case of bankruptcy.

bo Pollock says that it is by no means certain that Bovill's Act
really adds anything material to what has already been decided in
Cox v. Hickman, but suggests that, whereas Cox v. Hickman decided

TESTS OF PARTNERSHIP. 35

of a partnership, although the words "partner" or "partner-
ship" do not occur in the agreement,81 and certainly, where
such an agreement has been proved, the parties have usually
been held to be partners.82 But an agreement to share profits
and losses does not absolutely, and as a matter of law, create a
partnership; and, if other circumstances in the transaction
show that the parties did not intend (in the legal sense already
explained) to create a partnership, none is created.83

only that sharing profits is not conclusive evidence of partnership,
and leaves it to be dealt with as a question of fact whether this is
sufficient evidence in any case, the act goes a step further, and pre-
vents it from being alone sufficient in any of the classes of cases
dealt with. Pol. Partn., art. 7.

siLindl. Partn., p. 10; Scott v. Campbell, 30 Ala. 728. If two or
more persons, without a special or express agreement to form a part-
nership, contribute to a fund to be invested, as occasion offers, in
notes, stocks, and the like, and agree to share the gains and losses
thereof, they thereby become partners. Robinson v. Parker, 11 App.
Cas. (D. C.) 132.

82 Morse v. Richmond, 97 111. 303; Smith v. Small, 54 Barb. (N. Y.)
223; Priest v. Chouteau, 12 Mo. App. 252; Chouteau v. Raitt, 20 Ohio,
132, 144; Getchell v. Foster, 106 Mass. 42; Tyler v. Scott, 45 Vt. 261,
267; Pierce v. Shippee, 90 111. 371; Kuhn v. Newman, 49 Iowa, 424;
Hendy v. March, 75 Cal. 566; Manhattan Brass & Mfg. Co. v. Sears,
45 N. Y. 797; Day v. Stevens, 88 N. C. 83, 43 Am. Rep. 732. A con-
tract creates a partnership when it provides for a sharing of profits
and lossess in a business, and imposes the duty of accounting be-
tween the parties. Priest v. Chouteau, 12 Mo. App. 252, affirmed in
85 Mo. 398. An agreement between two men to cut and put up hay
together, sharing the expenses, losses, and profits, constitutes a part-
nership. Robinson v. Compher, 13 Colo. App. 343, 57 Pac. 754. In
Wills v. Simmonds, 51 How. Prac. (N. Y.) 48, the creditors of a
common debtor agreed to advance money for the purpose of carry-
ing on such debtor's business, the profits or losses to be shared pro-
portionately by the creditors. This was held to create a partnership.
Compare this with the decision in Cox v. Hickman, 8 H. L. Cas. 268.

s^Grinton v. Strong, 148 111. 587, 36 N. E. 559; Leonard v. Sparks,
109 La. 543; Monroe v. Greenhoe, 54 Mich. 9, 19 N. W. 569; Osbrey
v. Reimer, 51 N. Y. 630; Dwinel v. Stone. 30 Me. 34S. Burdiek's Cases,
17; Snell v. De Land. 43 111. 323; Clifton v. Howard. SO Mo. 192;

36 WHAT CONSTITUTES A PARTNERSHIP.

The true rule is thai such an agreement is merely prima
\ j.lfiu ■> -of a partnership. This means that, if all that is
known is that two or more persons arc sharing the profits and
of a business, the inference is that such persons are part-
ners; Inn if there arc any circumstances in the case which
show thai the participation in profits and losses is upon any
other basis than as joint proprietors of the business, there is
qo room for this inference, and no partnership is created.84

1 8 . Sharing Profits, With Nothing Said About Losses. —
Partnership is prima facie the result of an agreement to
share profits^, though nothing is said about losses.

It has already been seen that the mere fact that certain per-
sons share the profits of a business is not conclusive evidence
that they are partners, because, as is frequently the case, such

1 S. W. 26, Burdick's Cases, 88; Newberger v. Friede, 23 Mo. App.
G31; McPhillips v. Fitzgerald, 76 App. Div. (N. Y.) 15; Morgan v.
Stearns, 41 Vt. 398; Moore v. Williams, 31 Tex. Civ. App. 287, 72
S. W. 222; Bullen v. Sharp, L. R. 1 C. P. 86, 125, Burdick's Cases, 71.
"While the agreement ... to share one-half the profits and
losses might raise a presumption of partnership, yet if the parties
actually meant that there was to be no partnership created, and so
contracted, the presumption would be rebutted." National Surety
Co. v. T. B. Townsend Brick & Contracting Co., 176 111. 156, 52 N. E.
938, wherein it was held that an agreement between a contractor and
a firm in his employ to share the profits and losses of the interprise
does not create a partnership as between the parties, where it is
clear the arrangement was made to measure the compensation of
the employees, and not with the intention of creating a partnership.
In the case of a subpartnership, there is a sharing of the profits and
losses of a business, and yet, as has been seen, the subpartner is not
?. partner in the principal firm. See supra, §§ 6, 7.

s* Morse v. Richmond, 97 111. 303; Clifton v. Howard, 89 Mo. 192,
1 S. W. 26, Burdick's Cases, 88; National Surety Co. v. T. B. Town-
send Brick & Contracting Co., 176 111. 156, 52 N. E. 938. It is merely
'a presumption of law which prevails in the absence of controlling
circumstances. Pierpont v. Lamphere, 140 111. App. 232; Johnson v.
Carter, 120 Iowa, 355, 94 N. W. 850.

TESTS OF PARTNERSHIP. 37

profits may be shared on some other basis than as common
owners or joint proprietors of such profits. But where all
that is known is that several persons are sharing the profits
of a business, the most natural inference is that they share the
profits because they jointly own them. Accordingly, proof
of a participation in the profits of a business raises a prima
facie presumption of the existence of a partnership.85 This
presumption is not conclusive, but may be overthrown by proof
of other circumstances, showing that the profits are shared on
some other basis than as common owners,86 for example, in

ssPooley v. Driver, 5 Ch. Div. 458; Meehan v. Valentine, 145 U. S.
€11, Burdick's Cases, 80, Mechem's Cases, 103; Parchen v. Anderson,
5 Mont. 438, 51 Am. Rep. 65; Parker v. Canfield, 37 Conn. 250; Fourth
Nat. Bank v. Altheimer, 91 Mo. 190, 3 S. W. 858; Lengle v. Smith,
48 Mo. 276; Lockwood v. Doane, 107 111. 235; Ryder v. Wilcox, 103
Mass. 24, Burdick's Cases, 525; In re Gibb's Estate, 157 Pa. 59, 27
Atl. 383; Glore v. Dawson, 106 Mo. App. 107, 80 S. W. 55; Fechteler
v. Palm Bros. & Co. (C. C. A.), 133 Fed. 462. Participation in the
profits of a business is prima facie strong evidence of a partnership
in it. And this rule apples to a party who receives a sum equal to
a certain share of the profits, as well as to a party receiving such
share of profits by the name of profits. Parker v. Canfield, 37 Conn.
250.

se Wild v. Davenport, 48 N. J. Law, 129, 7 Atl. 295, Burdick's Cases,
77; Lockwood v. Doane, 107 111. 235; Waggoner v. First Nat. Bank,
43 Neb. 84, 61 N. W. 112; In re Gibb's Estate, 157 Pa. 59, 27 Atl. 383.
See, also, ante, § 10. Under the doctrine prevailing before the decis-
ion of Cox v. Hickman, profit sharing was conclusive proof of a part-
nership, at least as to third persons. See ante, § 9. But see Parker
v. Canfield, 37 Conn. 250, commenting on effect of decisions before
Cox v. Hickman.

"It it said (and about that there is no doubt) that the mere par-
ticipation in profits inter se affords cogent evidence of partnership.
But it is now settled by the cases of Cox v. Hickman, 8 H. L. Cas.
268, Burdick's Cases, 65; Bullen v. Sharp, L. R. 1 C. P. 86. and
Mollwo v. Court of Wards, L. R. 4 P. C. 419, that although a right to
participate in profits is a strong test of partnership, and there may
be cases where, upon a simple participation in profits, there is a pre-
sumption, not of law, but of fact, that there is a partnership, yet
whether the relation of partnership does or does not exist must de-

3S WHAT CONSTITUTES A PARTNERSHIP.

lieu of wages for services, rein of property, interest on money,
and the like.87 Ilul in the absence <if any such explanation as
to the basis upon which the profits are shared, mere proof of
profit-sharing is sufficient to establish the fact of partner-
ship.88 Where there is nnthina: to show a contrary intention,
it will be presumed that losses were to be shared in the same
proportion as the profits, and the case falls within the rule that
an agreement to share both the profits and losses of a business
is prima facie evidence of a partnership.89 .

pend upon the whole contract between the parties, and that circum-
stance is not conclusive." Ross v. Parkyns, L. R. 20 Eq. 335.

" See ante, § 10.

ssLockwood v. Doane. 107 111. 235; Ryder v. Wilcox, 103 Mass. 24,
Burdick's Cases, 525; Cothran v. Marmaduke, 60 Tex. 370; Fourth
Nat. Bank v. Althemier, 91 Mo. 190, 3 S. W. 858; Meehan v. Valentine,
145 U. S. 611, Burdick's Cases, 80, Mechem's Cases, 103. See, also,
cases cited supra in this section.

89 Oppenheimer v. Clemmons, 18 Fed. 886; Richards v. Grinnell,
63 Iowa, 44, 18 N. W. 668; Johnson v. Carter, 120 Iowa, 355, 94 N. W.
850; Illingworth v. Parker, 62 111. App. 650; Jones v. Murphy, 93 Va.
214. 24 S. E. 825; Cothran v. Marmaduke. 60 Tex. 370; Lengle v.
Smith, 48 Mo. 276; Wilcox v. Dodge, 12 111. App. 517. Where two
persons engage in a joint venture — one to furnish capital, and the
other skill and labor, and both to share the profits — it is a partner-
ship, though there is no agreement as to sharing losses; the law pre-
suming such agreement. Dow v. Dempsey, 21 Wash. 86, 57 Pac. 355.
"An agreement between two or more parties to engage jointly in
the business of supplying a government post might constitute a
"partnership," although the term were not used, nor any express
mention made, in regard to profits or losses. If it were understood
between the parties that there was to be a communion of profit, it
would be a partnership. 'A communion of profit implies a com-
munion of loss; for every man who has a share of profits of a trade
ought also to bear his share of the loss.' " Bloomfield v. Buchanan,
13 Or. 108, 8 Pac. 912. It is not necessary that there should be an
express stipulation to share profit and loss in order to constitute a
partnership. If it were understood between the parties that there
was to be a communion of profit, that would be a partnership. Bloom-
field v. Buchanan, 13 Or. 108, 8 Pac. 912; Manhattan Brass & Mfg.
Co. v. Sears, 45 N. Y. 797. In Iowa, it is held that a contract which

TESTS OF PARTNERSHIP. 39

19. Sharing Profits, With Stipulation Against Losses. —
Partnership is prima facie the result of an agreement to
share profits, although community of loss is stipulated
against.

Persons who agree to share the profits of a business are
prima facie partners, although they stipulate that they will
not be liable for losses beyond the sum which they engaged to
subscribe.90 It has been said that, in order to constitute a
partnership, a community of both profits and losses is essen-
tial.91 But there appears to be nothing to prevent one or
more partners from agreeing to indemnify the others against
loss, or to prevent full effect from being given to a contract of
IDartnersliip containing such a clause of indemnity.92 Lind-

does not provide for a sharing of losses, as well as profits, does not
create a partnership. Winter v. Pipher, 96 Iowa, 17, 64 N. W. 663,
Burdick's Cases, 90; McBride v. Ricketts, 98 Iowa, 539, 67 N. W. 410.
But compare Richards v. Grinnell, supra.

00 Walden v. Sherburne, 15 Johns. (N. Y.) 409; Pollard v. Stanton,
7 Ala. 761; Clift v. Barrow, 108 N. Y. 187, 15 N. E. 327, Burdick's
Cases, 93. A partnership may exist, though one partner guaranties
that the profits of the other partner shall amount to a certain sum.
Robbins v. Laswell, 27 111. 365. If parties agree to share profits, they
are partners as to such profits, although they do not agree to share
in losses. Id.

93 Mayrant v. Marston, 67 Ala. 453; Whitehill v. Shickle, 43 Mo.
537; Ruddick v. Otis, 33 Iowa, 402; Coope v. Eyre, 1 H. Bl. 37,
Mechem's Cases, 64; Winter v. Pipher, 96 Iowa, 17, 64 N. W. 663;
McBride v. Ricketts, 98 Iowa, 539, 67 N. W. 410; Pattison v. Blanch-
ard, 5 N. Y. 186; Vanderburgh v. Hull, 20 Wend. (N. Y.) 70; Cum-
mings v. Mills, 1 Daly (N. Y.) 520. "It is well settled in this state
that a mere participation in the profits of a business does not con-
stitute a partnership as between the parties. There must be a shar-
ing of the losses." Porter v. Curtis, 96 Iowa, 539, 65 N. W. 824, cit-
ing Price v. Alexander, 2 G. Greene (Iowa) 431; Williams v. Soutter,
7 Iowa, 445; Munson v. Sears, 12 Iowa, 178; Holbrook v. Oberne, 56
fowa, 324, 9 N. W. 291; Winter v. Pipher, 96 Iowa, 17, 64 N. W. 663.

■'- Oppenheimer v. Clemmons, 18 Fed. 888; Bond v. Pittard, 3 Mees
& W. 357; Gilpin v. Enderbey, 5 Barn. & Aid. 954; Fereday v. Hor-
dern, Jac. 144. Sharing the losses of adventure is not essential to

4i | WB AT CONSTITUTES A PARTNERSHIP.}

ley says thai the true effect of such a stipulation is to entitle
some of the partners to indemnity against losses in excess of
the advances, but not against loss of the advances themselves,
ami that, if the loss of the advances is stipulated against, the
contract becomes one of loan, and not of partnership.93 It
is often a very difficult matter to determine whether a person
advancing money and sharing profits is to be considered a
creditor or a partner. This can only be decided by a careful
study of the whole agreement, with especial reference to what
rights are conferred upon or taken from the person making the
advances.94 Thus, if, in addition to a right to an account
and an inspection of the books of the borrower, the person
making the advances reserves a right to control the business
or the employment of the assets, or to wind up the business,
he ceases to be a mere lender, and becomes, in effect, a part-
ner.95 A partner who has stipulated against any personal

a copartnership. If there is a community of interests in the profits,
as such, of the husiness, and not by way of compensation for serv-
ices rendered or capital loaned toward the prosecution of the busi-
ness, it is sufficient to constitute a partnership. Waggoner v. First
Nat. Bank, 43 Neb. 84, 61 N. W. 112.

ss Lindl. Partn. p. 15. Orvis v. Curtiss, 12 Misc. 434, 33 N. Y. Supp.
589, but this case was reversed, and the contrary was squarely held,
in 157 N. Y. 657.

o-* See Mollwo v. Court of Wards, L. R. 4 P. C. 419; Pooley v.
Driver, 5 Ch. Div. 458; Badeley v. Consolidated Bank, 34 Ch. Div.
536.

»b Lindl. Partn. p. 17; Orvis v. Curtiss, 12 Misc. 434, 157 N. Y. 657,
33 N. Y. Supp. 589; Magovern v. Robertson, 116 N. Y. 61, Mechem's
Cases, 122; Hackett v. Stanley, 115 N. Y. 625, 14 Daly (N. Y.) 210,
22 N. E. 745, Burdick's Cases, 57; Leggett v. Hyde, 58 N. Y. 272, Bur-
dick's Cases, 50; Rosenfield v. Haight, 53 Wis. 260, 10 N. W. 378;
Spaulding v. Stubbings, 86 Wis. 255, 56 N. W. 469, Mechem's Cases,
117; Waverly Nat. Bank v. Hall, 150 Pa. 466, 24 Atl. 665; Voorhees
v. Jones, 29 N. J. Law, 270. Community of interest in profits, not
by way of compensation for services rendered or capital loaned, but
profits, as such, a community of interest in the property the subject
of the venture, and a community of power of management of such

Ai^v_ ^/*m*^ • ^r*^~

TESTS OF PARTNERSHIP. 41

liability lias been held not liable to one who deals with the
firm with notice of such limitation upon his liability; °6 but
the better opinion would seem to be that all are primarily
liable to a third person, because all are partners, and that the
partner must seek his indemnity from his copartners.97

20. Sharing Gross Returns. — PajJjiei^hipJ^-aQjtUhe^^l^t
of an agrennfnt tn ihnrf grflfifi reruns

TUinaJnjig h^rni afttjjftjjhat an agreement to share gross re-
fnmHrvf a joint vp.nt.nre oWs not create a partnership.98 Even
underthe old doctrine that persons who shared profits were

property, are correct tests of partnership. Waggoner v. First Nat.
Bank, 43 Neb. 84, 61 N. W. 112.

»G Bailey v. Clark, 6 Pick. (Mass.) 372.

97 Pollard v. Stanton, 7 Ala. 761; Clift v. Barrow, 108 N. Y. 187,
15 N. E. 327; Everitt v. Chapman, 6 Conn. 347; Brown v. Leonard, 2
Chit. 120; Walden v. Sherburne, 15 John. (N. Y.) 409; Lindl. Partn.
p. 41; Bond v. Pittard, 3 Mees & W. 357; Fereday v. Hordern, Jac.
144; Vocrhees v. Jones, 29 N. J. Law, 270. "One partner may ex-
pressly stipulate that he is not to share in losses, and such an agree-
ment will be valid between the parties, but he cannot thus withdraw
himself from his obligation, as a partner, to strangers." Oppen-
heimer v. Clemmons, 18 Fed. 888.

as Blue v. Leathers, 15 111. 31; Beecher v. Bush, 45 Mich. 188, 7
N. W. 785; Merrick v. Gordon, 20 N. Y. 93; Champion v. Bostwick,
18 Wend. (N. Y.) 175; Everett v. Coe, 5 Denio (N. Y.) 180; Heini-
street v. Howland, 5 Denio (N. Y.) 68; Pattison v. Blanchard, 5
N. Y. 186; Putnam. v. Wise, 1 Hill (N. Y.) 234; Day v. Stevens, 88
N. C. 83, 43 Am. Rep. 732; Brown v. Jaquette, 94 Pa. 113, 39 Am.
Rep. 770; Ambler v. Bradley, 6 Vt. 119; Cedarburg v. Guernsey, 12
S. D. 77, 80 N. W. 159; Mason v.. Potter, 26 Vt. 722; Oppenheimer v.
Clemmons, 18 Fed. 886; Benjamin v. Porteus, 2 H. Bl. 590; Dry v.
Boswell, 1 Camp. 330; Mair v. Glennie, 4 Maule & S. 240; Wilkin-
son v. Frasier, 4 Esp. 182; Heyhoe v. Burge, 9 C. B. 431; Eastman
v. Clark, 53 N. H. 276. Contra, Jones v. McMichael, 12 Rich. (S. C.)
176; Allen v. Davis, 13 Ark. 28; Holifield v. White, 52 Ga. 567;
Adams v. Carter, 53 Ga. 160. A contract that a person furnishing
logs to a saw mill shall receive as compensation therefor, either one-
half of the lumber made from the logs, or a stipulated price per

tL. WHAT CONSTITUTES A PARTNRSHIP.

liable to third persons as it' they wore partners, it was held
that persons who merely divided gross returns did not incur
any Buch liabilities." In this connection, the term "gross
profits," sometimes me1 with m the books, is used synonym-
ously with "gross returns." 10°

The pea] reason why an agreement to share the gross re-
turns dec- ix. i create a partnership is that such an agreement
cannot possibly constitute the parties thereto joint proprietors

hundred feet for such half, does not create a partnership, for such
person has no interest, either in the profits or losses of the busi-
ness. Thornton v. George, 108 Ga. 9, 33 S. E. 633. To same effect
is Parker v. Fergus, 43 111. 437.

99 See cases cited in preceding note. Speaking of the distinction
between agreements to share profits and agreements to share gross
returns, Lindley says (page 9): "The reasonableness, however, of
the above distinction, is very questionable, at least where there is
any community of capital or common stock; and the rule itself is
probably attributable less to the difference which exists between net
profits and gross returns than to the doctrine which so long con-
fused the whole law of partnership in this country, and according
to which all persons who shared profits incurred liability as if
they were really partners. When this doctrine was rife, the dis-
tinction between sharing net profits and gross profits (i. e., returns)
had considerable practical value; but, as will be seen hereafter, the
doctrine in question is now wholly exploded, and the distinction al-
luded to is of little importance."

"Whether a man is a partner or not depends upon the nature of
his interest in the profits. The profits of a trade are included with-
in the gross proceeds, and, if a man is interested as owner in the
latter of these funds, he must be also in the former; for there is
nothing in the mere deduction in the expenses of the business from
its proceeds which affects, in any way, the kind of interest of those
concerned therein. Hence, the question still must be, not whether
a man share in gross or in net receipts, but what is the nature of
his interest in either of these funds? If his interest is that of
owner, then he is a partner; otherwise not." Wheeler v. Farmer.
38 Cal. 205.

ioo Profits are the excess of returns over advances. Therefore the
terms "profits," "net profits," and "net returns" are all synonymous.
The term "gross profits" is inaccurate. "Gross returns" is what is
meant. See Lindl. Partn. p. 7.

TESTS OF PARTNERSHIP. 43

of the profits, which has been seen to be the one essential ele-
ment of every true partnership. Snch an agreement creates
merely a debt between the parties, for the share may be
claimed, even where there are no profits, but a loss instead.
"Though the sum may come out of profits, if they are suffi-
cient, it will nevertheless come out of somebody, though there
be no profits. The fixed amount, which is independent of the
success or failure of the business, betrays a stranger's interest,
and not a principal's." 101 Where, however, there is a joint
business or common stock or capital, and a division of the
product in kind, it has been held that a partnership is
created.102

Illustrations of Rule.

Perhaps the strongest illustration of the rule under consid-
eration is afforded by those cases where co-owners of chattels
agree to divide the earnings obtained by the use or employ-
ment thereof. Such an agreement does not constitute the co-
owners partners.103 "Where two persons bought a circus, and

101 J. Pars. Partn. § 62. This excellent little book is not so widely
known as its merits deserve. See, also, Everett v. Coe, 5 Denio
(N. Y.) 180.

io2Everitt v. Chapman, 6 Conn. 347; Jones v. McMichael, 12 Rich.
(S. C.) 176; Stapleton v. King, 33 Iowa, 28, 11 Am. Rep. 109; Musier
v. Trumpbour, 5 Wend. (N. Y.) 274.

103 in French v. Styrnig, 2 C. B. (N. S.) 357, Ames' Cas. Partn. 41,
the plaintiff and defendant were the common owners of a race horse.
It was agreed that the plaintiff should keep, train and have the
management of the horse; that thirty-five shillings a week should
be allowed for the expenses of his keep; that the plaintiff should
pay the expenses of entering the horse, 'and conveying him to the
different races; and that one-half of the horse's keep and other ex-
penses and his winnings should be equally divided between the
plaintiff and the defendant. This agreement was held not to create
a partnership. It was said to be no more a partnership than if two
tenants in common of a house had agreed that one of them should
have the general management, and provide funds for necessary re-
pairs, and that the net rent should be divided between them equally.

44 WHAT CONSTITUTES A PARTNERSHIP.

one agreed to manage it, and divide the gross receipts with the
other, no partnership was created.104 A lessor of property for
a proportion of the gross receipts is not a partner of the
Lessee.108 So, where two persons were respectively the lessee
and manager of a theater, and they shared the gross receipts
equally, the manager paying the expenses out of his share, it
was held that no partnership subsisted.100 The cultivation of
land for a share of the crops is not a partnership.107 The
crew of a whaling ship, who are to be paid by the owners a
certain share of the oil brought home, are not partners with
the owners. 10s A retiring partner, receiving, for his interest,
a percentage upon the gross future sales of the firm, is not a
partner in the new firm.109 ISTo partnership exists between
the owner of a barge and a man who works it, and receives for
his wages half the gross earnings.110 A contract to keep stock

lo-t Quackenbush v. Sawyer, 54 Cal. 439, Burdick's Cases, 25.

105 Beecher v. Bush, 45 Mich. 188, 7 N. W. 785, Mechem's Cases, 86;
Heimstreet v. Howland, 5 Denio (N. Y.) 68; Knowlton v. Reed, 38
Me. 246.

ioo Lyon v. Knowles, 3 Best & S. 556.

loiTayloe v. Bush, 75 Ala. 432; Gurr v. Martin, 73 Ga. 528; Blue
v. Leathers, 15 111. 31; Putnam v. Wise, 1 Hill (N. Y.) 234; Mann
v. Taylor, 5 Heisk. (Tenn.) 267; Brown v. Jaquette, 94 Pa. 113.
Contra, Allen v. Davis, 13 Ark. 28; Holifield v. White, 52 Ga. 567;
Adams v. Carter, 53 Ga. 160. Where the landlord furnishes the land
and teams and feed for them, and the tenant supplies the labor and
provisions for the laborers, in the cultivation of a crop, the gross
product to be divided between them, without any account of ex-
penditures made by either, the agreement does not constitute an
agricultural partnership. Day v. Stevens, 88 N. C. 83; Parker v.
Fergus, 43 111. 437. But an agreement to carry on a farm, one fur-
nishing the land, outfit and necessary money, the other furnishing
laborers and superintending, half the money furnished to be re-
paid, and the profits to be divided between them, constitutes a part-
nership. Reynolds v. Pool, 84 N. C. 37, 37 Am. Rep. 607, Burdick's
Cases, 30.

los Wilkinson v. Frasier, 4 Esp. 182; Holden v. French, 68 Me. 241.

i"!' Gibson v. Stone, 43 Barb. (N. Y.) 285.

no Dry v. Boswell, 1 Camp. 330. See, also, Lowery v. Brooks, 2 Mc-
Cord (S. C.) 421.

TESTS OF PARTNERSHIP. - 45

for a share of the increase does not create a partnership.111
Where connecting carriers have associated themselves under a
contract for a division of the profits of the carriage in certain
proportions, or of the receipts from it after deducting any of
the expenses of the business, they become jointly liable as
partners to third persons ; but where the agreement is that
each shall bear the expenses of his own routes, and that the
gross receipts shall be divided in proportion to distance, or
otherwise, they are partners neither inter se nor as to third
persons, and incur no joint liability.112

21. Sharing Losses Only. — Partnership is not the result of
an agreement to share losses or expenses only.

Where there is an agreement to share losses, but no agree-
ment, express or implied, to share profits, no partnership is
created. This is necessarily so, for, as has been seen, a com-
munity of ownership in the profits is the very essence of a
partnership.113 Where the enterprise is not undertaken for
profit, there is no partnership.114 Thus, where two connect-
ing carriers agreed to bear jointly all losses to persons or goods

in Beckwith v. Talbot, 95 U. S. 289; Robinson v. Haas, 40 Cal. 474.

112 Hutch. Car. (2d. Ed.) § 169; Hale, Bailm. & Carr. pp. 473-475;
Bostwick v. Champion, 11 Wend. (N. Y.) 571, 18 Wend. (N. Y.)
175; Block v. Fitchburg R. Co., 139 Mass. 308, 1 N. E. 348; Gass v.
New York P. & B. R. Co., 99 Mass. 220; Merrick v. Gordon, 20 N. Y.
93; Briggs v. Vanderbilt, 19 Barb. (N. Y.) 222; Insurance Co. v.
Railroad Co., 104 U. S. 146; Post v. Southern R. Co., 103 Tenn. 184r
52 S. W. 301, 55 L. R. A. 481.

us Jones v. Howard, 53 Miss. 707; Moss v. Jerome, 10 Bosw.
(N. Y.) 220; Alabama Fertilizer Co. v. Reynolds, 79 Ala. 497; Irvia
\. Nashville, C. & St. L. R. Co., 92 111. 103, 34 Am. Rep. 116. But
see Hendrick v. Gunn, 35 Ga. 234.

in Thus, an arrangement between B. and C. for "mutually keep-
ing house," by which C. is to pay the house rent and the butcher's
bill, and B. is to pay the other bills for the family expenses, does
not, as a matter of law, make B. and C. partners, or authorize C. to
bind B. to third parties for the rent. Austin v. Thomson, 45 N. H.
113.

i -

4f, WHAT CONSTITUTES A PARTNERSHIP.

qoI traceable to either alone, they were not thereby made part-
ners.115 So, where the joint owners of a horse agree that one
of them >li;ill keep it, the expense of so doing to be shared by
both, no partnership is created.116 Persons who have agreed
to share the costs of a lest case in eon rt are not partners.117

Same — Common Stock ok Capital.

22. A community of interest in the stock or capital, by
means of which profits are earned, is not essential to the
existence of a partnership.

Jj^s^jiotessential to the existence of a partnership thai.
1 1 1 «■ ic shairBejny joint capitadoT'sTfick. If several persons
labor together for the sake of profit, and dividing that profit,
they will not be any less partners because they labor with their
own tools or property.118 A partnership may exist between
persons, one of whom furnishes all the capital, and the other

uslrvin v. Nashville, C. & St. L. Ry. Co., 92 111. 103; Aigen v.
Boston & M. Railroad, 132 Mass. 423.

"6 Oliver v. Gray, 4 Ark. 425, Burdick's Cases, 16.

ii7 Carter v. Carter, 28 111. App. 340.

i^Lindl. Partn. p. 13, citing Fromont v. Coupland, 2 Bing. 170,
wherein two persons who horsed a coach, and divided the profits,
were held to be partners, although each found his own horses, and
the other had no property in them. See, also, Meyer v. Sharpe, 5
Taunt. 74; Smith v. Watson, 2 Barn. & C. 401; Gardiner v. Childs, 8
Car. & P. 345; Stevens v. Faucet, 24 III. 483, and cases cited infra,
this section. "It is not necessary to constitute a partnership, that
there should be any property constituting the capital stock which
shall be jointly owned by the partners; but the capital may consist
in the mere use of property owned by the individual partners sepa-
rately, and it is sufficient to constitute the relation that they have
agreed to share the profits and losses arising from the use of prop-
erty or skill, either separately or combined." Bigelow v. Elliot, 1
Cliff. 36. See, also, Oppenheimer v. Clemmons, 18 Fed. 888 Fed Cas.
No. 1,399.

TESTS OF PARTNERSHIP. 47

merely services, the profits only being shared.119 But where
a person is sharing the profits of a business, the fact that he
has an interest in the capital or stock is a circumstance tend-
ing strongly to show that he is a joint proprietor of the busi-
ness and its profits, and therefore a partner, — in fact, the con-
-elusion of partnership is almost irresistible.120

no Bucknam v. Barnuna, 15 Conn. 67; Robbins v. Laswell, 27 111.
365; Lockwood v. Boane, 107 111. 235; Pierce v. Shippee, 90 111. 371;
Kuhn v. Newman, 49 Iowa, 424; Ryder v. Wilcox, 103 Mass. 24, Bur-
dick's Cases, 525; Mulhall v. Cheatham, 1 Mo. App. 476; Ruckman
v. Decker, 23 N. J. Eq. 283; Hayes v. Vogel, 14 Daly (N. Y.) 486;
Pooley v. Driver, 5 Ch. Div. 458. "Whether each contributes money
or labor, or both money and labor, or as in the present case, one
finds money, and the other labor, still it is equally a partnership."
Miller v. Hughes, 1 A. K. Marsh. (Ky.) 182. "The contract provides
that plaintiff shall furnish the goods, and the defendant his time,
and the profits and losses are to be shared equally. This is a very
common and usual contract of partnership, and it must be held, we
think, that these persons were partners, unless there is some other
provision of the contract, of a controlling nature, which changes
what is regarded as the established rule." Kuhn v. Newman, 49
Iowa, 428.

1-" Webster v. Clark, 34 Fla. 637; Sankey v. Columbus Iron Works,
44 Ga. 228; Morse v. Richmond, 97 111. 303; Richards v. Grinnell, 63
Iowa, 44, 18 N. W. 668; Somerby v. Buntin, 118 Mass. 279; Bohrer v.
Drake, 33 Minn. 408, 23 N. W. 840; Chase v. Barrett, 4 Paige, Ch.
(N. Y.) 148; Hackett v. Stanley, 115 N. Y. 625, 22 N. E. 745, Bur-
dick's Cases, 57; Magovern v. Robertson, 116 N. Y. 61, 22 N. E. 398,
Mechem's Cases, 122; Mumford v. Nicholl, 20 Johns. (N. Y.) 611;
Sawyer v. First Nat. Bank, 114 N. C. 13, 18 S. E. 949; Hulett v. Fair-
banks, 40 Ohio St. 233; Credit Mobilier v. Com., 67 Pa. 233; Jones v.
McMichael, 12 Rich. (S. C.) 176; Cothran v. Marmaduke, 60 Tex.
370; Spaulding v. Stubbings, 86 Wis. 255, 56 N. W. 469, Mechem's
Cases, 117; Meehan v. Valentine, 145 U. S. 611, Burdick's Cases, 80,
Mechem's Cases, 103; Ward v. Thompson, 22 How. (U. S.) 330.
"Where" it appears that there is a community of interest in the cap-
ital stock, and also a community of interest in the profit and loss,
then it is clear that an actual partnership exists between the par-
ties." Flower v. Barnekoff. 20 Or. 132, 25 Pac. 370. Where one party
holds title to all the property used in the conduct of a business and
Las the exclusive possession and control of both the property and the

4S WHAT CONSTITUTES A PARTNERSHIP.

Questions of Law and Fact.

23. -The existence of a partnership is a mixed question of
law and fact.

:

Whether or not the relation of partnership exists between
t wo or more persons with respect to a given matter is a mixed
question of law and fact.121 "Where there is no controversy as
to the facts, as where the question turns upon the construction
nf a written agreement, or where the facts have been separ-
ately found in a special verdict, the court may determine
whether or not a partnership exists as a matter of law.122

business, but, by an agreement, contracts to share profits with an-
other, the agreement does not, in the absence of other proof of an
intention to be partners, constitute, inter sese, a partnership. It is
only a contract for sharing of profits. Jernee v. Simonson, 58 N. J.
Eq. 282, 43 Atl. 370.

121 Thompson v. First Nat. Bank, 111 U. S. 529, Burdick's Cases,
96; Kingsbury v. Tharp, 61 Mich. 216, 28 N. W. 74. And see the cases
cited in the two following notes. "What may constitute the legal
relation of partnership between two or more persons in a given mat-
ter is a question of both fact and law." Robinson v. Parker, 11 App.
Cas. (D. C.) 140. "What constitutes a partnership is a question of
law. Whether a partnership, in the legal sense, exists, is a question
of fact." Ellison v. Stuart (Del. Super.), 43 Atl. 838.

122 Chisholm v. Cowles, 42 Ala. 179; Morgan v. Farrel, 58 Conn.
413, 20 Atl. 614; Everitt v. Chapman, 6 Conn. 347; Doggett v. Jordan,
2 Fla. 541; Lintner v. Millikin, 47 111. 178; Kingsbury v. Tharp, 61
Mich. 216, 28 N. W. 74; Cumpston v. McNair, 1 Wend. (N. Y.) 457;
Farmers' Ins. Co. v. Ross, 29 Ohio St. 429; Boston & Colorado Smelt-
ing Co. v. Smith, 13 R. I. 27, 43 Am. Rep. 3; May v. International
Loan & Trust Co., 34 C. C. A. 450; Waggoner v. First Nat. Bank, 4&
Neb. 84, 61 N. W. 112; Rider v. Hammell, 63 Kan. 733, 66 Pac. 1026.
The rule is well settled that the construction of contracts, written
or verbal, rests exclusively with the court, and they cannot be ex-
pounded by witnesses. Lintner v. Millikin, 47 111. 178. Where the
agreement under which a business arrangement is carried on, and
which is claimed to be a partnership, is in writing, and free from
ambiguity or doubt, its legal effect must be determined as a matter
of law, and the intention of the parties gathered therefrom; but if

FUTURE PARTNERSHIPS. 40

Where the facts are not admitted, and a special verdict find-
ing the facts only is not demanded, the existence of a partner-
ship is to be determined by the jury under proper instructions-
from the court as to what facts, if found, will constitute &
partnership*23

Contracts foe Futuee Paetneeships.

24. "Partnership is not the result of an agreement to .share
profits so Ion g~a1Tany thing remains to be done before
the right to share them accrues." 12i

Persons who have entered into a contract to become partners
at some future time, or upon the happening of some future
contingency, do not become partners until the agreed time has

the terms employed leave the true meaning in doubt, the construc-
tion put upon the contract by the parties thereto may be looked to
in determining its legal effect. Webster v. Clark, 34 Fla. 637, 16
So. 601. In construing a contract with reference to whether or not
it creates a partnership, a federal court is not bound to follow state
decisions, but will exercise its own independent judgment. Ban-
croft v. Hambly, 94 Fed. 975, 36 C. C. A. 595.

123 McGrew v. Walker, 17 Ala. 824; Pardridge v. Ryan, 14 111. App.
598; Chamberlain v. Jackson, 44 Mich. 320; Densmore v. Mathews,
58 Mich. 616, 26 N. W. 146; McDonald v. Matney, 82 Mo. 358; Wag-
goner v. First Nat. Bank, 43 Neb. 84, 61 N. W. 112; Chase v. Stevens,
19 N. H. 465; Seabury v. Bolles, 51 N. J. Law, 103, 16 Atl. 54; Butler
v. Finck, 21 Hun (N. Y.) 210; Meridan Nat. Bank v. Gallaudet, 120
N. Y. 298, 24 N. E. 994; McDuffie v. Bartlett, 3 Pa. 317; Spencer v.
Jones, 92 Tex. 518. "The plaintiff also contends that, inasmuch as
participation in profits, if not conclusive, it at least prima facie evi-
dence of partnership, it is for the jury to say whether the defendants
are partners or not. This may be so if there is testimony, outside
the contract and its execution, going to show the existence of a part-
nership. But if there is no such outside testimony — if all that the
members of the firm of Mason, Chapin & Co. have done is to carry
the contract into effect according to its terms — then the question is

i2*Lindl. Partn. p. 20.

50 WHAT CONSTITUTES A PARTNERSHIP.

arrived or the contingency lias happened.126 An executory
contract does not create a partnership. The contract must be
executed, and the partnership actually "launched," before the
relation will arise.1-0 Even after the arrival of the stipu-

wholly tor the court; for nothing done in execution of the contract
could create a partnership unless the contract is itself a contract for
a partnership, and whether it is or not, it heing a writing, is simply
a question of legal construction." Boston & Colorado Smelting Co. v.
Smith, 13 R. I. 34.

T-'Lindl. Partn. p. 20. See, also, Snodgrass v. Reynolds, 79 Ala.
452; Doyle v. Bailey, 75 111. 418; Wilson v. Campbell, 10 111. 383;
Sailors v. Nixon-Jones Printing Co., 20 111. App. 509; Handlin v.
Davis, 81 Ky. 34; Hall v. Edson, 40 Mich. 651; Dow v. State Bank of
Sleepy Eye, 88 Minn. 355, 93 N. W. 121; Brink v. New Amsterdam
Fire Ins. Co., 5 Rob. (N. Y.) 104; Latta v. Kilbourn, 150 U. S. 546,
Burdick's Cases, 503, Mechem's Cases, 212. "There is, of course, an
essential difference between a mere proposition to form a partner-
ship, and its actual constitution." Atkins v. Hunt, 14 N. H. 205.

i2c in Meagher v. Reed, 14 Colo. 335, 24 Pac. 681, the court said:
"A marked distinction exists in law between an agreement to enter
into the copartnership relation at a future day and a copartnership
actually consummated. It is an elementary principle that a partner-
ship in fact cannot be predicated upon an agreement to enter into
a copartnership at a future day unless it be shown that such agree-
ment was actually consummated. In the language of the text-books,
the partnership must be 'launched.' To constitute the relation,
therefore, the agreement between the parties must be an executed
agreement. So long as it remains executory, the partnership is in-
choate, not having been called into being by the concerted action
necessary under the partnership agreement. It is undoubtedly true
that a partnership in praesenti may be constituted by an agreement
if it appears that such was the intention of the parties. But where
it expressly appears that the arrangement is contingent, or is to
take effect at a future day, it is well settled that the relation of part-
ners does not exist, and that, if one or more of them refuse to per-
form the agreement, there is no remedy between the parties except
a suit in equity for specific performance, or an action at law for the
recovery of damages, should any be sustained." See, also, Wilson
v. Campbell, 10 111. 383. A subscription to shares is but an act or
declaration of the subscriber to become a partner, and is executory
only. Hedge's Appeal, 63 Pa. 273.

FUTURE PARTNERSHIPS. 51

lated time, the parties are not necessarily partners, and in fact
they are not partners unless the partnership is launched.12'
Any act, the performance of which is made a condition pre-
cedent to the formation of the partnership, must be performed
before a partnership will be held to exist,128 though of course
it is competent for the parties themselves to waive conditions
]3recedent ; and such conditions are waived where the parties
actually ''launch" the partnership without waiting for per-
formance.129

It is often difficult to determine whether the intention of
the parties was to create a present partnership, or only to
stipulate for a partnership in the future. "The test, how-
ever, is to ascertain, from the terms of the agreement itself,
whether any time has to elapse, or any act remains to be done,
before the right to share profits accrues, for, if there is, the
parties will not be partners until such time has elapsed or act

127 Wilson v. Campbell, 10 111. 383; Doyle v. Bailey, 75 111. 418;
Gray v. Gibson, 6 Mich. 300. See, also, preceding note. Where the
partnership articles are signed, and an attempt is made, as a firm,
to purchase goods on credit, the partnership is launched, although
the partners afterwards discontinue it because of inability to obtain
goods on credit. Thurston v. Perkins, 7 Mo. 29. In Battley v. Lewis,
1 Man. & G. 155, the parties actually commenced business on the day
named, and it was wholly immaterial, as regarded the question be-
fore the court, what the terms of the partnership were. See Lindl.
Partn. p. 23.

128 Johnston v. Eichelberger, 13 Fla. 230; Metcalf v. Redman, 43
111. 264; Hobart v. Ballard, 31 Iowa, 521; Haskins v. Burr, 106 Mass.
48; Hoile v. York, 27 Wis. 209.

129 pierce v. Whitney, 39 Ala. 172; Johnston v. Eichelberger, 13,
Fla. 230; Palmer v. Tyler, 15 Minn. 106; Hartman v. Woehr, 18 N. J.
Eq. 383; McStea v. Matthews, 50 N. Y. 166; Cook v. Carpenter, 34 Vt.
121. Where all the proposed partners have not signed the partner-
ship articles, but those who have signed proceed to act as partners
without waiting for the signature of the others, the persons so act-
ing are partners inter se. Hubbard v. Matthews, 54 N. Y. 43, 13 Am.
Rep. 562.

52 WHAT CONSTITUTES A PARTNERSHIP.

has been performed." 1S0 The real intention of tlie parties
La the controlling consideration.131

A con! met for ;i future partnership is annulled by the death
of a party while the contract is yel executory.13 !i

Illustrations.

One who has stipulated for an option to become a partner
in a certain business is not a partner until he has exercised
his option and elected to become a partner.132 "Where it is
the intention of the parties not to be partners until they have
signed formal articles of partnership, they are not partners
until they have signed such articles.133 But unless the sign-

isoLindl. Partn. p. 20. Where it is provided that the shares of
a joint-stock association may be transferred only on consent of the
directors, a purchaser of shares is not a partner until such consent
has been given. Kingman v. Spurr, 7 Pick. (Mass.) 235. See, also,
Perring v. Home, 4 Bing. 28. One who, upon the repayment of cer-
tain money, advanced by him to the lessee of a music hall, secured
by a mortgage of the lease and fixtures of the music hall, is to be-
come a part owner in the business of the hall, does not, prior to
such repayment, occupy the position of a partner in the business,
and become liable for advances made to the enterprise by a third
party. McLeod v. Miner, 38 App. Div. (N. Y.) 115.

131 Gill v. Kuhn, 6 Serg. & R. (Pa.) 333. See, generally, supra,
§ 13, "Intention the Real Test." Where the contract states that the
parties thereto "have entered" into a partnership, and no time is
stated at which the partnership shall commence, it commences at
once. Ingraham v. Foster, 31 Ala. 123.

i3ia Dow v. State Bank of Sleepy Eye, 88 Minn. 355, 93 N. W. 121.
And see In re Hoagland's Estate, 51 App. Div. 347, 64 N. Y. Supp.
920.

132 Morrill v. Spurr, 143 Mass. 257; Irwin v. Bidwell, 72 Pa. 244;
Ex parte Davis, 4 De Gex, J. & S. 523; Gabriel v. Evill, 9 Mees & W.
297; Howell v. Brodie, 6 Bing. N. C. 44. An option to elect not to-
be a partner is valid, at least between the parties. Bidwell v. Madi-
son, 10 Minn. 13.

133 Martin v. Baird, 175 Pa. 540, 34 Atl. 809. In Baldwin v. Bur-
rows, 47 N. Y. 199, several persons purchased goods in common, with
the intention of subsequently forming a partnership in regard to

ASSOCIATIONS NOT FOR PROFIT. 53

ing of articles was intended to be a condition precedent to the
existence of a partnership, the parties may be partners, al-
though they in fact contemplated signing formal articles, but
did not do so.134 Signing partnership articles, like-any other
condition precedent, may be waived by actually launching the
partnership without waiting. -far pp.rfnrm^p^- 135

Good Faith Required.

The agreement for a future partnership must be such, bona
fide, for if it is a mere colorable device for creating a partner-
ship, and at the same time concealing it, so as to avoid partner-
ship liability, it will be held to create a partnership.136

Associations ISTot for Profit.

25. Societies and clubs, the object of which is not to share
profits, are not partnerships, nor are their members, as .....
such, liable for each other's acts.

Where the object of an association is not to share profits, it
is clearly not a partnership,137 because, as has been seen, the
essential element and ultimate test of a partnership is an
agreement to share the profits of a business as common own-
such goods, but without any present contract for the sale of the
goods and a division of the profits. It was held that until the part-
nership agreement was actually made, no partnership existed be-
tween the joint purchasers, but that they were merely tenants in
common of the goods.

134 Wood v. Cullen, 13 Minn. 394; Hubbard v. Matthews, 54 N. Y.
43, 47; Battley v. Lewis, 1 Man. & G. 155.

185 See Battley v. Lewis, 1 Man. & G. 155, and remarks of Lindley
(page 23) thereon. See, also, supra, this section.

isoCourtenay v. Wagstaff, 16 C. B. (N. S.) 110, per Williams, J.,
page 131.

187 "it is a mere misuse of words to call such associations partner-
ships." Lindl. Partn. p. 50.

54 WHAT CONSTITUTES A PARTNERSHIP.

era.188 The members of such associations are only liable for
their own personal acts, or for the acts of their authorized
agents.189 "And the agency must he made out by the person
who relies on it, for none is implied Ivy the mere fact of asso-
ciation." n" 'Inn-, the members of a Young Men's Christian
Association, Masonic Lodge, <»r other similar society or club,
are nol partners.1" So, co-operative stores which sell only to
their members are not partnerships, but where thev sell to o
siders they are partners

1-42

«8 An agreement that something shall be attempted with a view
to gain, and that the gain shall be shared by the parties to the agree-
ment, is the grand characteristic of every partnership, and is the
leading feature of nearly every definition of the term. Lindl. Partn.
p. 2; Mollwo v. Court of Wards, L. R. 4 P. C. 436; Reg. v. Robson,
16 Q. B. Div. 137. See ante, §§ 14, 15.

139 Burt v. Lathrop, 52 Mich. 106, 17 N. W. 716, Mechem's Cases,
4; Eichbaum v. Irons, 6 Watts & S. (Pa.) 67.

140 Lindl. Partn. p. 50. See, also, Richmond v. Judy, 6 Mo. App.
465; Ash v. Guie, 97 Pa. 493, Burdick's Cases, 30; Sizer v. Daniels,
66 Barb. 426; Flemyng v. Hector, 2 Mees & W. 172; Burls v. Smith,
7 Bing. 705.

hi Woodward v. Cowing, 41 Me. 9; Richmond v. Judy, 6 Mo. App.
465; Lafond v. Deems, 81 N. Y. 507; Ash v. Guie, 97 Pa. 493, Bur-
dick's Cases, 30; Caldicott v. Griffiths, 8 Exch. 898; Flemyng v.
Hector, 2 Mees & W. 172; Reg. v. Robson, 16 Q. B. Div. 137. Organi-
zation for religious and social purposes, the members living as one
family. Teed v. Parsons, 202 111. 455, 66 N. E. 1044. Such societies
have, however, been called "partnerships." See Lloyd v. Loaring,
6 Ves. 773; Silver v. Barnes, 6 Bing N. C. 180; Beaumont v. Mere-
dith, 3 Ves. & B. 180. An association, each member of which agrees
in writing to pay the sum subscribed by him for the purpose of
building a meeting house, which, when completed, is to be the prop-
erty of the subscribers in the proportions of the amounts invested
in it by them respectively, is not a partnership. Woodward v. Cow-
ing, 41 Me. 9. Artificial business organizations in Ohio, except clubs
and organizations not for profit, are either corporations or partner-
ships. There is nothing intermediate. Wehrman v. McFarland, 9
Ohio Dec. 400.

»a Hodgson v. Baldwin, 65 111. 532; Atkins v. Hunt, 14 N. H. 205,
Mechem's Cases, 49. See, generally, Henry v. Jackson, 37 Vt. 431.

CO-OWNERSHIP DISTINGUISHED. 55

Co-OWXEESHIP DISTINGUISHED.

26. The common ownership of property does not, of itself.

create any partnership between the owners. But if they
employ the common property in a business, and share
the profits as distinguished from the gross returns, they
are partners.

Although the incidents of partnership are different in many
respects from the incidents of co-ownership,143 it is neverthe-
less often a very difficult question to determine which of the
two relations exist, for this question must be determined be-

i« Speaking generally, and excluding all exceptional cases, the
principal differences between co-ownership and partnership may be
stated as follows: (1) J^o^wnership_ is not necessarily the result
o£agreement. Partnership is. (2) Co ownerhlp does not necessarily

involve community of profit or of loss. Partnership does. (3) One
ctj-owner ran, without the consent of the others, transfer his inter-
est to a stranger, so as to put him in the same position, as regards
fhe'orher owners, as the transferor himself was before the transfer.
A partner cannot do this. (4) One co-owner is not, as such, the
agent, real or implied, of the others. A partner is. (5) One co-
owner has no lien on the thing owned in common for outlays and
expenses, nor for what may be due from the others as their shares. \f\
of a common debt. A partner has. (6) One co-owner of land is en-
tttTecTTo have it divided between himself and co-owners, but not— *^
Cexcept by virtue of a recent statute,) to have it sold against their /

consent. A partner has no right to partition in specie, but is enti-
tled, op a dissolution, i : the partnership property, whether
land or not, sold, and the proceeds divided. (7) As, between the
real and personal representatives of a deceased co-owner of freehold
land, the equitable as well as the legal interest in his share is real
estate, whilst, as between the real and personal representatives of a
deceased partner, the equitable interest^ fo his share of partnership
freehold property is treated as pergonal ,.esta_teL althoujgh^the^^eg^l
interest in it is t*?,\ fffitatp (8) Co-ownership not necessarily exist-
ing; for the sake of gain, and partnership existing for no other pur-
pose, {.he remedies, by way of account and otherwise, which one co-
owner has against the others, are in many important respects differ-

56 WHAT CONSTITUTES A PARTNERSHIP.

fore it is known which set of incidents attach. If two per-
Bona purchase property to hold jointly or in common, they are
co-owners, and nol partners, unless that was their intention.144
Moreover, there may be an agreement as to the management
and use of the commoi] property, and ihe application of the
produce or gains derived from it, without any partnership
arising.1 '"' I f gnnds arc purchased for resale under an agree-
ment to divide the profits from the transaction, the purchasers
arc partners.146 But if the goods are not purchased, for re-
sale, but for the purpose, of dividing, the, goods themselves be-
tween the purchasers, there is no partnership.147 "If each

ent from, and less extensive than, those which one partner has
against his copartners." Lindl. Partn. p. 58.

miliff v. Brazill, 27 Iowa, 131: Thurston v. Horton, 16 Gray
(Mass.) 274; State Bank v. O. S. Kelley Co., 47 Neb. 678, 66 N. W.
619; Butler Sav. Bank v. Osborne, 159 Pa. 10, 28 Atl. 163. The joint
purchase of property by several does not of itself constitute a part-
nership. Breard v. Blanks, 51 La. Ann. 1507, 26 So. 618.

145 French v. Strying, 20 C. B. (N. S.) 357, 366, Burdick's Cases, 22;
Pillsbury v. Pillsbury, 20 N. H. 90; Woodward v. Cowing, 41 Me. 9;
Sargent v. Downey, 45 Wis. 498.

i« Reid v. Hollinshead, 4 Barn. & C. 867. See Farmers' Ins. Co.
v. Ross, 29 Ohio St. 429. Where several parties unite in the pur-
chase of real estate, not as a permanent investment, but as a specu-
lation, and with a view of selling the same for profit, and there is
a community of ownership of the property, community of power in
carrying on the enterprise, and community of interest in the profits
and losses arising from the same, it will ordinarily be treated as a
partnership. Jones v. Davies, 60 Kan. 309, 56 Pac. 484. If two per-
sons buy a horse, each paying one-half of the purchase money, under
an agreement that either of them having possession of the horse
shall provide for his keeping, without cost to the other, and that
each shall offer the horse for sale and endeavor to procure a pur-
chaser at a profit over his cost, but that neither shall sell the horse
Avithout the concurrence of the other, they are tenants in common
of the horse, and not partners. Goell v. Morse, 126 Mass. 480, Bur-
dick's Cases, 23.

147 Coope v. Eyre, 1 H. Bl. 37; Hoare v. Dawes, 1 Doug. 371; Gib-
son v. Lupton, 9 Bing. 297.

CO-OWNERSHIP DISTINGUISHED. 57

■owner does nothing more than take his share of the gross re-
turns obtained by the use of the common property, partner-
ship is not the result. 14S On the other hand, if the owners
convert those returns into money, brinff that money into a
common stock, defray out of it the expenses pf obtaining the
returns, and then divide the net profits, partnership is cre-
ated in the profits, if not also in the property which yields
them." 149 There may be co-ownership without partnership
in the property itself, together with a real partnership in the
business of managing it for the common benefit.150

i*8Gilman v. Cunningham, 42 Me. 98; Thurston v. Horton, 16
Gray (Mass.) 274; Chase v. Stevens, 19 N. H. 465; Butler Sav. Bank
v. Osborne, 159 Pa. 10, 28 Atl. 163. See supra, § 20, "Sharing Gross
Returns." Tenants in common engaged in the use, employment, and
development of their common property will be presumed, in the ab-
sence of proof of a contract of partnership, to continue to be ten-
ants in common, and not partners. Dunham v. Loverock, 158 Pa.
197, 27 Atl. 990, Mechem's Cases, 6; Butler Sav. Bank v. Osborne,
159 Pa. 10, 28 Atl. 163. The several owners of a vessel are tenants
in common, and not partners. Coursin's Appeal, 79 Pa. 20; Macy v.
DeWolf, 3 Woodb. & M. 193, Fed. Cas. No. 8,933; Helme v. Smith,
7 Bing. 709, Burdick's Cases, 21. But they may be partners. Camp-
bell v. Mullett, 2 Swanst. 551; Hopkins v. Forsyth, 14 Pa. 34; Phil-
lips v. Purington, 15 Me. 425; Ward v. Bodeman, 1 Mo. App. 272.

noLindl. Partn. p. 53. But see French v. Styring, 2 C. B. (N. S.)
355, Ames' Cas. Partn. 41, Burdick's Cases, 22, wherein Willis, J.,
said that if two tenants in common of a house agreed that one of
them should have the general management and provide funds for
necessary repairs, and that the net rent should be divided between
them, no partnership would be created. Where N. purchased from
A., who owned a stallion jointly with B., his half interest in the use
of the stallion for a certain season, and subsequently entered into
a contract with B. to stand the horse in partnership, N. to pay all
expenses, and to reimburse himself out of moneys collected for the
services of the horse, the profits, if any, to be divided equally be-
tween them, there was a partnership. Smith v. Brannon, 22 Ky. L.
R. 178, 51 S. W. 178.

150 per Cockburn, C. J., in French v. Styring, 2 C. B. (N. S.) 355.
Burdick's Cases, 22; Campbell v. Mullett, 2 Swanst. 551. See, also,
Thurston v. Horton, 16 Gray (Mass.) 274. "'Part owners of a ship

5S WHAT CONSTITUTES A PARTNERSHIP.

Corporations I Distinguished.

Corporations are distinguished from partnerships prin-
cipally in two particulars —

(a) Corporations are organized under a franchise from the
state, while partnerships are not, and

(b) Corporations are legal entities while partnerships are
not.

"Both partnerships and private corporations are conven-
tional, so far as the members are concerned. The difference
consists in this: The former are authorized by the general
law among natural persons exercising their ordinary powers;
the latter by a special authority, usually, if not necessarily,
emanating from the legislature, and conferring extraordinary
privilege-." ,r'1 But the, most -important distinction is that
a corporation is recognized as a Wal entity, or urtififtiftl nar-
son. separate and distine.t. from its members or stockholders,
while, as will be seen, a partnership is not so regarded.152 As
a consequence of this doctrine, the continued existence of the
corporate entity is not affected by changes in its membership.
But a partnership is ahsohitely dissolved by any change in the
members composing il.ir,;! The rights and obligations of the
corporation belong to the fictitious person, and not to the stock-
holders, and can not be exercised or enforced directly by or

do not, by simply using it in a joint enterprise, become partners as
to the ship.' Civ. Code, § 2396. But the use of a ship is distinct
from the ship itself, and there may be a partnership in the use or
earnings, although, as to the vessel itself, the parties are tenants in
common." Hendy v. March, 75 Cal. 569, 17 Pac. 702, citing Merritt
v. Walsh, 32 N. Y. 689; Bulfinch v. Winchenbach, 3 Allen (Mass.)
161; Mumford v. Nicholl, 20 Johns. (N. Y.) 633; Hinton v. Law, 10
Mo. 701.

'■•' Per Cowen, J., in Thomas v. Dakin, 22 Wend. (N. Y.) 109.

'"-'See post, c. 4, "Firm as an Entity."
3ee post, § 143.

PROMOTORS OF CORPORATIONS. 59

against the stockholders. But the rights and liabilities of a
partnership are the rights and liabilities of the ipdjvjo'in<aJ
partners, and are enforcible bv or against them, fotifr?'fl-
ually.154 Thus, the profits, and in fact all the property of
the corporation, belongs to the corporation, and not to the
stockholders.155 But, the. profits and property of ft partner-
ship belong to the partners.156 And the rule is the same
where the stockholders are all corporations who form another
corporation for co-operative action. 156a

Promotees of Corporations or Joixt-Stock Companies.

28. Persons associated for the purpose of forming a corpo-
ration or a joint-stock company are net partners.

Corporations.

Promoters of corporations are not partners, because they
have not agreed to share the profits of a business as common

164 Lindl. Partn. p. 5. See, also, post, c. 4, "Firm as an Entity,"
and c. 10, "Actions." The corporation, and not its stockholders,
must bring trover or replevin for its property. Tomlinson v. Brick-
layers' Union No. 1, 87 Ind. 308; Button v. Hoffman, 61 Wis. 20, 20
N. W. 667.

«5 Queen v. Arnaud, 16 L. J. 2 B. 50, 1 Cum. Cas. Corp. 30. The
stockholders have no power to sell or convey corporate property.
This must be done in the corporate name. Wheelock v. Moulton, 15
Vt. 519; Humphreys v. McKissock, 140 U. S. 304. A person owning
all the stock of a corporation has not such an equitable estate in its
realty as authorizes him to convey it in his own name. Parker v.
Bethel Hotel Co., 96 Tenn. 252, 34 S. W. 209.

H»e See post, c. 4, "Firm as an Entity," and c. 7, "Partnership
Property."

iseaThe ordinary contract between a union depot corporation and
several railroad companies holding the stock of the depot company
and making joint use of the depot facilities does not create a part-
nership. Brady v. Chicago & G. W. R. Co. (C. C. A.) 114 Fed. 106,.
57 L. R. A. 712.

60 WHAT CONSTITUTES A PARTNERSHIP.

owner--. It' there can be said to be any agreement to shun'
profits, ii is i" do so as stockholders. The ownership of the
profits, when earned, will be in the corporation until distrib-
uted as dividends. So, also, the agreement between promoters
is for a future relation, and, upon principles just explained,
such a contract does not create a present partnership.107

Joint-Stock- ( 'ompan

Persons associated for the purpose of forming a joint-stock
company are not partners,168 although, as will be seen later,
joint-stock companies are a species of partnership.159 The
obvious reason is that the contract between them is simply one
for a future partnership, which, as has been seen, does not
create a present partnership.160

i57Lindl. Partn. p. 23; Reynell v. Lewis, 15 Mees. & W. 517, Bur-
dick's Cases, 33; Capper's Case, 1 Sim. (N. S.) 178; Mosier v. Parry,
GO Ohio St. 388, 54 N. E. 364; Ryland v. Hollinger (C. C. A.), 117
Fed. 216. Persons who own and conduct a business jointly are part-
ners; and though they contemplate a speedy incorporation and ex-
press that intent in their contract, they are, in the meantime, part-
ners. Bancroft v. Hambly, 36 C. C. A. 601.

"a West Point Foundry Ass'n v. Brown, 3 Edw. Ch. N. Y. 284;
Lindl. Partn. p. 24, citing Wood v. Duke of Argyll, 6 Man. & G. 928;
Hamilton v. Smith, 5 Jur. (N. S.) 32; Hutton v. Thompson, 3 H. L.
Cas. 161; Bright v. Hutton, 3 H. L. Cas. 368. An application for
shares and payment of the first deposit does not constitute one a
partner, where he had not interfered in the concern. Hedge's Ap-
peal, 63 Pa. 273. Persons who subscribe for shares in joint-stock
companies and pay deposits, but do not comply with the full con-
ditions of the association, and never become entitled to profits, are
not liable for debts, unless they are active in contracting them, or
hold themselves out as partners. The same principle will apply,
as far as it can, to a suggested limited partnership not carried
through. West Point Foundry Ass'n v. Brown, 3 Edw. Ch. (N. Y.)
284.

«9 See infra, § 12.

ico See supra, § 24.

ILLEGAL CORPORATIONS. gj

Stockholders ix Illegal or Defective Corporations.

2|i- Where the corporation is wholly illegal anrj nnan^r.
>^5y ized by law, the stockholders are liable as partners.

30.

Members of a corporation de facto, acting in good faith
under the belief that they constitute a corporation, are
not liable as partners.

31. Mere defects in organization, such as failure to comply
with some statutory requirement, will not, by the
weight of authority, render the members liable as part-
ners.

Illegal or Unauthorized Corporations.

Where persons assume to act as a corporation wholly with-
out authority of law they have usually been held to be liable
as partners.161 In such a case they must be presumed to
know that they are not stockholders in a valid corporation,
and, as it is clear that they intended to own and share the
profits in common, they are partners, because they have in-
tended and done those things which in law constitute a part-
nership.16* Even good faith and fhe adyice of coimgel wi]1

not overcome the presumption of knowledge of law, and pro-
tect them from partnership liability. 163 Thus, in the absence
of any statute under which a corporation could be created, the
members of an attempted corporation are liable as partners.164
So, members of a corporation organized for one purpose un-
der a statute which authorizes corporations only for other

im Where the corporation is simply a disguise for gambling trans-
actions. the members are personally liable. McGrew v. City Produce
Exch., 85 Tenn. 572, 4 Am. St. Rep. 771.

«•" See supra, § 13, "Intention the Real Test "

"a Eaton v. Walker, 76 Mich. 579, 43 N. W. 638, Mechem's Cases 8

164 in re Mendenhall, 9 N. B. R. 497, Fed. Cas. No. 9,425.

,;o WHAT CONSTITUTES A PARTNERSHIP.

purposes, are liable as partners.168 Incorporators under an
unconstitutional law are Liable as partners.166

De Facto < Corporations.

The members or stockholders of a de facto corporation, as
distinguished from one which is entirely illegal or unauthor-
ized, are no1 liable as partners.167 The status of a de facto
corporation can not be attacked save in a direct proceeding for
that purpose by the state.

Defects in Organization.

Where persons ad in good faith, honestly believing that
they constitute a corporation, but, owing to a failure to com-
ply with some statutory requirement, no valid incorporation
lias been effected, the weight of authority is that they can not
be held liable as partners,108 but the authorities taking a con-

165 Vredenburg v. Behan, 33 La. Ann. 627. In this case there was
an attempt to incorporate a rifle club under a statute which author-
ized corporations only for literary, scientific, or charitable purposes.
See, also, Booth v. Wonderly, 36 N. J. Law, 250; Merchants' & Manu-
facturers' Bank v. Stone, 38 Mich. 779, and note the dissenting
opinion.

we Baton v. Walker, 76 Mich. 579, 43 N. W. 638, Mechem's Cases, S.
But see State v. How, 1 Mich. 512.

167 Stout v. Zulick, 48 N. J. Law, 599, 7 Atl. 362; Snider's Sons
Co. v. Troy, 91 Ala. 244, 8 So. 658; Merriman v. Magiveny, 12 Heisk.
(Tenn.) 494; Cannon v. Brush Elec. Co., 96 Md. 446, 54 Atl. 121;
American Salt Co. v. Heidenheimer, 80 Tex. 344; Planters' & Miners'
Bank v. Padgett, 69 Ga. 159; Merchants' & Manufacturers' Bank v.
Stone, 38 Mich. 779; In re Gibb's Estate, 157 Pa. 59, 27 Atl. 383.

168 Humphreys v. Mooney, 5 Colo. 282; Stafford Nat. Bank v. Pal-
mer, 47 Conn. 443; Cross v. Pinckneyville Mill Co., 17 111. 54; Tar-
bell v. Page, 24 111. 46; Doty v. Patterson, 155 Ind. 60, 56 N. E. 668;
Ward v. Brigham, 127 Mass. 24; First Nat. Bank v. Almy, 117 Mass.
476; Fay v. Noble, 7 Cush. (Mass.) 188; Seacord v. Pendleton, 55
Hun, 579, 9 N. Y. Supp. 46; Raisbeck v. Oesterricher, 4 Abb. N. C.
i X. V.) 444; Central City Sav. Bank v. Walker, 66 N. Y. 424; Fuller
v. Rowe, 57 N. Y. 23; Second Nat. Bank v. Hall, 35 Ohio St 158;

ILLEGAL CORPORATIONS. 63

trary view are very numerous.18* Of course, many cases of

defectively organized corporations fall under the rule of de

facto corporations. It has been held that a person who ™P.

tracts with an association without aT1Y, knowledge or imt^ce, of

^ e];mn "f '^P'^- «;.xistc.,ice may sue then iates as

partners, and show that th.j W. ^^^, } with tho

law under which, they c]n\m |ft fa ormisaj.i" Where the
members of an existing partnership attempt to form a corpora-
tion to carry on the corporate business, and, through noncom-
pliance with the law, no valid corporation is formed, the mem-
bers remain partners."* The individuals who transit, ft.
bsiness on behalf of thf ^WOrt corporatio„ ^ m
li_abe m the same wav ¥ ™ ^Wsible a^.t. is personally
liable where he has no rppl p^^i m »

f Findlarvd J\T n ^ °S 218: C°Chran V" ArD0,d' 58 Pa- 399'- stokes
v. Findlay, 4 McCrary, 205, Fed. Cas. No. 13,478; Gartside Coal Co

v. Maxwell 22 Fed. 197. But see Bigelow v. Gregory 73 111 m
theenC t" ° ^ T C°mPlete,y °rganiZed and i-orporated under

comntroZ » T '^ aCt' eXC6Pt that ^ haS n° Certificate fro^ the
comptroller authorizing it to act, are not liable as copartners on a

"Lrl:; ^ *" ^^ h™^™> as in such case hey
ration dpg "" ***** °f ^ aSSUmed ^oration, but of a corpo
rat.on de jure, as yet powerless to make a lease. Seeberger v Mc-
Cormick, 178 111. 404, 53 N. E. 340 Buerger v. Mc

III' m^f ' V' RjChardS0D' 35 Ark- 144; Bigelow v. Gregory, 73

Iowa f 4grAStT' 85 I1L 164; KaiSer V- La™ce Sav" Bank,
56 Iowa, 104, 41 Am. Rep. 85, 8 N. W. 772, Mechem's Cases 16- Mont

^ZJuZ p8' "8 MIT 249' ^ N- & 343: Gle- - Bergmam/o
fm AI; V- ThaW' 72 M°- 446: Martin v. Fewell 79 Mo

401; Abbott v. Omaha S. & R. Co., 4 Neb. 416; Lity Ins Co v

B^k'v LndR 6?K;MHv " BeaCh' 12 N- J- Eq- * " Sion
Bank v. Landon, 45 N. Y. 410; Jessup v. Carnegie, 80 N. Y 441- Eliot

v. Himrod, 108 Pa. 569; Smith v. Colorado Fire Ins. Co., 14 Fed 3 9
attemrp0tntSoCaf:rnlnS " b"SineSS ^ * ^ ™™ *«** an a^ tte

TZa:%Z\ZZ?on are liable as — «— -

'•"Guckert v. Hacke, 159 Pa. 303, 28 Atl 249

171 Bates, Partn. § 8.

'"Medill v. Collier, 16 Ohio St. 599; Second Nat. Bank v. Hall,

G4 WHAT CONSTITUTES A PARTNERSHIP.

Knowledge of Lad- of Corporate Existence.

Persons transacting business as a corporation^__birt_\vlio
know that for one reason or "another" they do not constitute a
"valid corporation, are liable as partners.173 So, where they
lmowingly conduct a business not authorized by their char-
ter,171 or continue business knowing that their charter has ex-
pired,175 they will be held liable as partners. The reason for
this is that, where they know that they are not a corporation,
it is clear that they intended to carry on a business and share
the i noli is in common, and, as has been seen, this constitutes
a partnership.

Partnership as to Third Persons.

32. Persons not really partners inter se may incur liability
to third persons as though they were partners.

33. This liability has been declared in two classes of cases —

(a) Where the parties have shared profits, and

(b) Where the parties have held themselves out as part-

ners.

Same — By Sharing Profits.

34. B yjjie^grfiat weight of modern authority, persons who

share the profits of a business are not, for that reason
alone, liable as partners to third persons, unless they
are really partners inter se.

The former doctrine, that any sharing of the profits of a
business was sufficient to fix a partnership liability upon the

35 Ohio St. 158, 166; Fuller v. Rowe, 57 N. Y. 23. The liability is
in tort for acting as agents without a principal, and not in contract.
Trowbridge v. Scudder, 11 Cush. (Mass.) 83.

its Ridenour v. Mayo, 40 Ohio St. 9; Stafford Nat. Bank v. Palmer,
47 Conn. 443. See, also, Gartside Coal Co. v. Maxwell, 22 Fed. 197.

i74Rianhard v. Hovey, 13 Ohio, 300; Ridenour v. Mayo, 40 Ohio
St. 9. Contra, Trowbridge v. Scudder, 11 Cush. (Mass.) 83.

»b National Union Bank v. Landon, 45 N. Y. 410.

AS TO THIRD PERSONS. 65

persons so sharing profits, irrespective of their actual relation
inter se, has already been sufficiently discussed.176 It has
also been seen that, since the decision of Cox v. Hickman, this
erroneous doctrine has been almost completely abandoned, and
now persons are not liable as partners, although they share
profits, unless they really are partners.177 There is no longer
any distinction between partnerships inter se and partner-
ships as to third persons.178

Same — By Holding Out.

35- Whoever knowingly suffers himself to be represented
as a partner in a particular firm is liable as a partner,'
upon the principle of estoppel, to any one who has, on
the faith of such representation, given credit to the firm. "

36. No one is liable as a partner upon the ground of holding
out Unless two things concur, viz. :

(a) The holding out must have been done by him or by his
consent, and, ""*"■ — %

(b) The holding out must have been known to the person
seeking to avail himself of it.

37- Holding out imposes no liability for torts.

Although it is an erroneous use of the term to speak of a
partnership as to third persons where there is no partner-
ship inter se, a person may be estopped to deny the fact that

"o See supra, § 9, "Former Doctrine."

m See supra, § 10, "Modern Doctrine." Without a contract of
partnership, or such acts and declarations as lead others to infer
its existence, and to extend credit on that basis, there is no founda-

^0nZhlf Hability a$ a Partner Can rest In re Gibb's Estate,
157 Pa. 59, 27 Atl. 383. But see other Pennsylvania cases cited supra,

1™"' Partnership' is a relation inter se, and the word cannot in
strictness, be used except to signify that relation." Beecher v. Bush,
5

tV, WHAT CONSTITUTES A PARTNERSHIP.

lie la a partner. "Where a man holds himself out as a
partner, or allows others to do it, he is then properly estopped
from denying the character he has assumed, and upon the
faith of which creditors may be presumed to have acted. A
man so acting may be rightly held liable as a partner by estop-
pel." l79 It is wholly immaterial whether the party holding
himself out as a partner does or does not share the profits or
losses.180 Even if the creditor knows that the real partners

45 Mich. 188, 7 N. W. 785, Mechem's Cases, 86. See, also, to same
effect, the remarks of Bramwell, B., in Bullen v. Sharp, L. R. 1
C. P. 86.

i-o Mollwo v. Court of Wards, L. R. 4 P. C. 435. See, also, Waugh
v. Carver, 2 H. Bl. 235, Burdick's Cases, 47, Mechem's Cases, 67,
wherein the court said: "Now a case may be stated in which it is
the clear sense of the parties to the contract that they shall not be
partners; that A. is to contribute neither labor nor money, and, to
go still further, not to receive any profits. But if he will lend his
name as a partner he becomes, as against all the rest of the world,
a partner, not upon the ground of the real transaction between
them, but upon principles of general policy, to prevent the frauds
to which the creditors would be liable if they were to suppose that
they lent their money upon the apparent credit of three or four per-
sons, when, in fact, they lent it only to two of them, to whom,
without the others, they would have lent nothing." "A nominal part-
ner, who does not share in the profits, is not really a partner. His
liability to creditors is imposed upon him by law upon the ground
of a general policy to preserve good faith and prevent frauds in
business transactions." Oppenheimer v. Clemmons, 18 Fed. 888.
See, also, Poole v. Fisher, 62 111. 181; Kirk v. Hartman, 63 Pa. 97;
Cook v. Penrhyn Slate Co., 36 Ohio St. 135; Lancaster Co. Nat. Bank
v. Boffenmyer, 162 Pa. 559, 59 Atl. 855; Thomas v. Green, 30 Md. 1;
De Berkom v. Smith, 1 Esp. 29, Ames' Cas. Partn. 138. "A partner-
ship, as regulating the relations and interests of the members among
themselves, is not the same as a partnership formed and acting as
such in its relations to others. The latter may exist when held out
to the world, and inviting persons to deal with it, when the asso-
ciation among the members may not be a partnership." Day v. Ste-
vens, 88 N. C. 88.

180 Pringle v. Leverich, 16 Jones & S. (N. Y.) 90; Fisher v. Bowles,
20 111. 396; Ex parte Watson, 19 Ves. 461; Kirkwood v. Cheetham, 2
Fost. & F. 798.

AS TO THIRD PERSONS. 67

liave stipulated to indemnify the party lending his name
against liability, he is primarily liable to the creditor, and
must seek his indemnity from those who promised it.181

The question of the effect of holding oneself out as a part-
ner cannot be raised between the partners themselves, because
everyone is presumed to know who are his associates in busi-
ness.182

Requisite Character of the Holding Out.

As the liability in this class of cases rests upon estoppel, it
is obvious that a person cannot justly be held liable unless the
holding out was his own personal act,183 or unless it was done
with his knowledge and consent; 184 but the authority or con-
sent to a holding out by others may be either express or im-
plied, and, in either case, liability is incurred.185 And if

!8i Lindl. Partn, p. 41, citing Brown v. Leonard, 2 Chit. 120. See,
also, supra, § 19, "Sharing Profits with Stipulation against Losses."
Alderson v. Popes, 1 Camp. 404, note, seems to hold to the contrary,
but the report is unsatisfactory, and the case has been criticised by
Lindley (page 41).

182 Freeman v. Bloomfield, 43 Mo. 391.

i83Cassidy v. Hall, 97 N. Y. 159; Denithorne v. Hook, 112 Pa. 240,
3 Atl. 777; Bishop v. Georgeson, 60 111. 484; Seabury v. Bolles, 51
N. J. Law, 103, 16 Atl. 54; Benjamin v. Covert, 47 Wis. 375, 2 N. W.
625; De Berkom v. Smith, 1 Esp. 29, Ames' Cas. Partn. 138.

is* Nicholson v. Moog, 65 Ala. 471; Bartlett v. Powell, 90 111. 33L;
Wheeler v. McEldowney, 60 111. 358; Fletcher v. Pullen, 70 Md. 205,
16 Atl. 887, Mechem's Cases, 134; Kritzer v. Sweet, 57 Mich. 617, 24
N. W. 764; Rittenhouse v. Leigh, 57 Miss. 697; Appeal of Scull, 115
Pa. 141, 7 Atl. 588; Ihmsen v. Lathrop, 104 Pa. 365. See, also, cases
cited in preceding note. A person cannot be made a partner in
fact, or appearance, so as to bind him, unless by his consent, ad-
missions, or acts. The declarations or acts of others can have no
such effect unless authorized or ratified by him. Bishop v. George-
son, 60 111. 484.

iss Holland v. Long, 57 Ga. 36; Hinman v. Littell, 23 Mich. 484;
In re Jewett, 15 N. B. R. 126, Fed. Cas. No. 7,306; Thompson v. First
Nat. Bank, 111 U. S. 529. Consent may be inferred from a knowl-
edge of the holding out, and a failure to take any steps in repudia-

68 WHAT CONSTITUTES A PARTNERSHIP

there has been in fact a holding out, it is immaterial, so far
as liability to third persons is concerned, that consent to snch
holding oui was obtained by fraud or promises of irresponsi-
bility, provided the creditor had aothing to do with such fraud
or promises ls,: _J Yrhaps the mosl comnion ease of liahilil y hy
holding out is where a retiring partner fails to give notice of
his retircmenl from the firm. In such a ease, he is usually
held liable to those who deal with the firm believing hhn still
to be a member.1*7 Where the business is continued in the
old name, with the consent or acquiescence of the retiring
partner, he may he liahle upon the ground of holding out, even
though a notice of dissolution was published.188 But the
death of a partner ipso facto dissolves a partnership, and no-
tice thereof is not necessary to relieve the estate of the de-

tion of the act. Wright v. Boynton, 37 N. H. 9; Smith v. Hill, 45
Vt. 90. But compare Polk v. Oliver, 56 Miss. 566. Knowledge or
consent "may he inferred from circumstances, such as advertise-
ments, shop bills, signs, or cards, and from various other acts, from
which it is reasonable to infer that the holding out was with his
authority, knowledge, or assent." Fletcher v. Pullen, 70 Md. 205,
16 Atl. 887, Mechem's Cases, 134.

isoLindl. Partn. p. 42; Collingwood v. Berkeley, 15 C. B. (N. S.)
145; Maddick v. Marshall, 16 C. B. (N. S.) 387; Ellis v. Schmaeck,
5 Bing. 521.

is? The liability of retiring partners will be fully considered in a
subsequent chapter. See, infra, §§ 118-122. But see, in this con-
nection, Scarf v. Jardine, L. R. 7 App. Cas. 345, Burdick's Cases,
101; Newsome v. Coles, 2 Camp. 617; Benjamin v. Covert, 47 Wis.
375, 12 N. W. 625. Where a partnership incorporates, and the com-
pany continues to use the firm books, and continues the various run-
ning accounts without break, it is estopped to set up the incorpora-
tion as a defense against one who, without notice of the change,,
sells it goods, and charges them to the firm. Reid v. F. W. Krel-
ing's Sons' Co., 125 Cal. 117, 57 Pac. 773.

188 Fleming v. Dorn, 34 Ga. 213; Wait v. Brewster, 31 Vt. 516.
But compare Boyd v. McCann, 10 Md. 118, wherein it was held that
the fact that the firm name was kept over the door of the place of
business after dissolution of the partnership is not, of itself, suffi-
cient to charge the retiring partner.

AS TO THIRD PERSONS. 69

ceased partner from liability on contracts made by the surviv-
ing partners, even though, they continue the business in the
old name. The doctrine of holding out has never been applied
to such a case.189 A representation that one intends to be-
come a partner, as distinguished from a representation that
noe is in fact a partner, does not impose any liability.190
And one need not deny an unauthorized announcement that
he is a partner 190a unless the circumstances of its making are
such that good faith requires him to speak. A person may
hold himself out as a partner, or permit others to do so, and
yet conceal his name. Thus, if he is referred to as a partner
who does not wish his name disclosed, he is liable as a part-
ner.191 Whether or not a person has held or permitted him-
self to be held out as a partner is a question of fact, and not
of law.192

Creditor s Knowledge of Holding Out.

It has been thought that a person holding himself out as a
partner is liable as such to all the world, irrespective of
whether or not the creditor actually knew of such holding

isoLindl. Partn. p. 47; Webster v. "Webster, 3 Swanst. 490; Dick-
inson v. Dickinson, 25 Grat. (Va.) 321, Mechem's Cases, 374; Mar-
lett v. Jackman, 3 Allen (Mass.) 287, Burdick's Cases, 547; Caldwell
v. Stileman, 1 Rawle (Pa.) 212.

loo Bourne v. Freeth, 9 Barn & C. 632. Where it is shown that a
partnership existed between three persons, and, on the retirement
of one, the other two issued a statement announcing that they
would continue the business, and they did so through the same
agencies, and with unchanged assets and liabilities, such statement
and course of dealing are sufficient to establish the existence of a
partnership between them as to the property and business of the old
firm. Earle v. Art Library Pub. Co., 95 Fed. 544.

looaMunton v. Rutherford, 121 Mich. 41S, 80 N. W. 112.

loiMartyn v. Gray, 14 C. B. (N. S.) 824; Maddick v. Marshall, 16
C. B. (N. S.) 387.

192 Seabury v. Bolles, 51 N. J. Law, 103, 16 Atl. 54. Whether a
person held himself out as a partner is a fact to be ascertained by

70 WHAT CONSTITUTES A PARTNERSHIP.

out.198 I '-lit this view ignores the fact that liability by hold-
in -■ <>ut rests upon the principle of estoppel, and that estoppel
in turn rests upon the fact that one lias, by his conduct, in-
duced another to so alter his position, in reliance upon certain

the jury from all the evidence in the case. Thomas v. Green, 30
Mil. 1. It is a question of fact, and not of law. Fletcher v. Pullen,
70 Md. 205, 16 Atl. 887, Mechem's Cases, 134. Different juries may
come to different conclusions upon the same evidence. This is well
illustrated by the two cases of Wood v. Duke of Argyll, 6 Man. & G.
928, and Lake v. Duke of Argyll, 6 Q. B. 477. In both the cases, the
same acts were relied on to constitute a holding out, but in one the
jury found that there had been a holding out, and in the other that
there had not, and in both cases the court refused to set aside the
verdict.

A. and B. were partners. They agreed with C, who was the sales-
man, to associate his name with the firm. C. was to receive for his
services at the rate of four per cent, on the amount of cash and
credit sales, but was not to be bound for the debts of the firm. A no-
tice was published, in a newspaper of large circulation, that C. was
to have an interest in the establishment. It was held that this was
not a declaration of partnership, and did not make C. responsible
for the debts of the firm. Vinson v. Beveridge, 3 MacArthur (D. C.)
597. Where a mercantile agency, in behalf of a subscriber, obtained
statements from the person inquired about that he was a partner
in a certain firm, and such statements were sent to the subscriber,
who relied thereon, and extended credit to the firm, a jury is war-
ranted in finding him liable as a partner. Ellison v. Stuart, 2 Pen.
(Del.) 179, 43 Atl. 836.

Young v. Axtell, cited in Waugh v. Carver, 2 H. Bl. 242, Bur-
dick's Cases, 47, Mechem's Cases, 67; Mershon v. Hobensack, 22 N. J.
Law, 372; Pringle v. Leverich, 16 Jones & S. (N. Y.) 90; Poillon v.
Secor, 61 N. Y. 456, Ames' Cas. Partn. 147. In Poillon v. Secor, 61
N. Y. 456, Ames' Cas. Partn. 147, a person of the same name as the
retiring partner loaned his name to the firm for a consideration,
and the business was continued in the old firm name. This was
held to render such person liable as a partner to a creditor who did
not know of his connection with the firm, and who had not relied
upon him. The court said that the estoppel in this class of cases
might be rested upon the broad ground of public policy. The court
expressly approved the following rule stated by Mr. Parsons: "Where
one is held forth to the world as a partner, the first question is, was
he so held out by his own authority, assent, or connivance, or by

AS TO THIRD PERSONS. 71

facts, that it would be inequitable to allow the former to deny
such facts. Where the creditor did not know of the holding
out, it is, of course, clear that he did not extend credit or alter
his position in reliance upon the fact of partnership, and there
is therefore no reason why the alleged partner should be
estopped to deny that fact. Accordingly, the better opinion
is that a person held out as a partner is not liable as such ex-
cept to those who knew P^ ^mh.Mding1 QTlt previously to giv-
ing; crcl it, and were misled thereby.104 Of course the holding

his negligence? If by his authority, consent, or connivance, the
presumption is absolute that he was so held out to every customer
or creditor. If so held out by his own negligence only, he should
be held only to a creditor who has been actually misled thereby."
See, also, Pringle v. Leverich, 16 Jones & S. (N. Y.) 90.

is* Vinson v. Beveridge, 3 MacArthur (D. C.) 597; Hefner v.
Palmer, 67 111. 161; Sheldon v. Bigelow, 118 Iowa, 586; Allen v.
Dunn, 15 Me. 292, 33 Am. Dec. 614; Wood v. Pennell, 51 Me. 52;
Fletcher v. Pullen, 70 Md. 205, 16 Atl. 887, Mechem's Cases, 134;
Rice v. Barrett, 116 Mass. 312; Beecher v. Bush, 45 Mich. 188, 7
N. W. 785; 40 Am. Rep. 465, Mechem's Cases, 86; Kritzer v. Sweet,
57 Mich. 617, 24 N. W. 764; Rimel v. Hayes, 83 Mo. 200; Webster v.
Clark, 34 Fla. 637, 16 So. 601; Parchen v. Anderson, 5 Mont. 438, 51
Am. Rep. 65; Seabury v. Bolles, 51 N. J. Law, 103, 16 Atl. 54; Cook
v. Penrhyn Slate Co., 36 Ohio St. 135; Denithorne v. Hook, 112 Pa.
240, 3 Atl. 777; Pringle v. Leverich, 16 Jones & S. (N. Y.) 90; Cas-
sidy v. Hall, 97 N. Y. 159; Irvin v. Conklin, 36 Barb. (N. Y.) 64:
Shafer v. Randolph, 99 Pa. 250; Kirk v. Hartman, 63 Pa. 97; Thomp-
son v. First Nat. Bank, 111 U. S. 529, Burdick's Cases, 96; Pott v.
Eyton, 3 C. B. 32. But see Smith v. Hill, 45 Vt. 90, 12 Am. Rep. 189.

"The liability in such a case rests upon the principle of estoppel,
that by holding himself out, or permitting himself to be held out,
as a partner, he has induced persons dealing with the partnership
to believe him to be a partner, and, by reason of such belief, to give
credit to the person so held out as a member of the firm. As the
liability in such a case rests solely upon the ground that one can-
not be permitted to deny a partnership relation which, though not
existing in fact, he has asserted or permitted to appear to exist,
there is no just foundation for holding one liable as a partner when
in fact he was not one, although held out as such, when the creditor
did not know of the holding out, and did not act upon the supposi-

«L'

WHAT CONSTITUTES A PARTNERSHIP.

ou1 may be under such circumstances of publicity as to justify
a jury in finding thai the creditor knew of it, and acted upon
it.198 Unless the 1 loL I ing out occurred prior to the making of
the contracl in suit, there is uo liability, because it was obvi-

tion that the person sought to be charged was a partner in a firm
when dealings were had with and credit given to said firm. The
rule is correctly stated, we think, in the case of Thompson v. First
Nat. Bank, 111 U. S. 529, Burdick's Cases, 96, where it was held
that a person who is not actually a partner, and who has no interest
in the partnership, cannot, by reason of having held himself out
to the world as a partner, be held liable as such on a contract made
by the partnership with one who had no knowledge of the holding
out. Wood v. Pennell, 51 Me. 52; Cook v. Penryhn Slate Co., 36 Ohio
St. 135; Hicks & Co. v. Cram, 17 Vt. 449; Seabury v. Bolles, 51 N. J.
Law, 103, 16 Atl. 54. In this connection it may be stated, as was ob-
served in the case of Thompson v. First Nat. Bank, that there may
be cases in which the holding out has been public, and so long con-
tinued that a jury may infer that one dealing with the partnership
knew it, and relied upon it, without direct testimony to that effect."
Webster v. Clark, 34 Fla. 644, 16 So. 601.

"In Burgan v. Cahoon, 1 Pennypacker (Pa.) 320, it was said by
the court below, and affirmed by this court, that 'the evidence from
which you would have to find that he has so held himself out and
acted as a partner must be his acts in connection with the circum-
stances that were known to the plaintiffffs when they gave him
credit, and not only must his acts have been such as to justify a
reasonable belief that he was a partner, but to hold him on that
account you must further find, as a matter of fact, that they gave
him credit as such, because, if they did not, his holding himself out
as a partner would do them no harm.' This proposition of law is
accurately stated and sustained by abundant authority. The rule
is thus given in 1 Colly. Partn. § 19: 'No person can be fixed with
liability on the ground that he has been held out as a partner, un-
less two things occur, viz.: First, the alleged act of holding out
must have been done either by him, or by his consent; and, secondly,
it must have been known to the person seeking to avail himself
of it.' "

''Webster v. Clark, 34 Fla. 644, 16 So. 601; Thompson v. First
Nat. Bank, 111 U. S. 530, Burdick's Cases, 96. In Dickinson v. Valpy,
10 Barn. & Co. 140, Lord Wensleydale said: "If it could have been
proved that the defendant held himself out to be a partner, not to
the world, for that is a loose expression, but to the plaintiff him-

AS TO THIRD PERSONS. 73

■ously not relied upon.196 So, where the creditor knew of the
holding out, but also knew that the parties were not partners,
no liability as such exists.197

self, or under such circumstances of publicity as to satisfy a jury
that the plaintiff knew of it, and believed him to be a partner, he
would be liable to the plaintiff in all transactions in which he en-
gaged and gave credit to the defendant upon the faith of his being
a partner." See, also, opinion of Blackburn in Scarf v. Jardine, 7
L. R. App. Cas. 357, Burdick's Cases, 101. Mere proof of publication
in a newspaper is not sufficient to show that the creditor had such
knowledge at the time of the transaction. Vinson v. Beveridge, 3
MacArthur (D. C.) 597.

A witness for plaintiff testified that there was a sign upon the
factory of the company which read, "Hall, Nicoll & Granberry's Fac-
tory, Top Floor." There was no proof that plaintiffs ever saw or
knew of the sign, or that any reliance was placed upon it when their
debt was contracted. It was held that this testimony was insuffi-
cient to authorize a recovery against said defendants. So, also, held
as to declarations of one of the defendants to customers, referring
to the factory as their own, and speaking of its work as work they
were doing, in the absence of evidence that it was known to or re-
lied upon by plaintiffs when they sold the goods. Cassidy v. Hall,
97 N. Y. 160.

i9c Howes v. Fisk, 67 N. H. 289, 30 Atl. 351; Baird v. Planque, 1
Fost. & F. 344.

i9" Alderson v. Popes, 1 Camp. 404, note, Ames' Cas. Partn. 140;
Krans v. Luthy, 56 111. App. 506; Booe v. Caldwell, 12 Ind. 12;
Pratt v. Langdon, 97 Mass. 97. But see Brown v. Leonard, 2 Chit.
120, Ames' Cas. Partn. 141, wherein the plaintiff had notice that
one partner had retired from the firm, but that his name was to
continue in the firm until a future day. Having this notice, the
plaintiff became the holder of the note in suit, executed in the firm
name. It was held that the retired partner was liable upon the
note, notwithstanding the notice of plaintiff, upon the ground that
plaintiff had relied upon the legal responsibility incurred by a hold-
ing out.

When a third party has notice of the actual agreement existing
between those who hold themselves out as partners without being
such, he is bound to recognize its provisions, and if by them there
is no partnership inter sese, they are no longer (after such notice)
to be considered as partners so far as he is concerned. Beudel v.
Hettrick, 3 Jones & S. (N. Y.) 405. One who deals with persons

74 WHAT CONSTITUTES A PARTNERSHIP.

Liability for Torts.

The doctrine under consideration has no proper application
to net ions of tort arising from the negligent conduct of the al-
leged linn, where no trust has been put in it.198 But disre-
garding the principle of estoppel, which is the foundation of
the rule, it has been held that the nominal partner is liable
even in cases of torts.199 Of course, if the nominal partner
participates in any way in the tort, he may properly be held
liable. So, where the tort is founded upon a contract, which
contract was made under such circumstances of holding out
as to bind the nominal partner, he is liable in an action sound-
ing in tort.200

who declare themselves partners, and so conduct themselves, may
hold them liable as partners, even though he has notice of the actual
agreement between them. He is not bound, at his peril, to put a cor-
rect construction upon their agreement, different from that which
they have themselves put upon it. Stearns v. Haven, 14 Vt. 540.

loaLindl. Partn. p. 47.

wo In Stables v. Eley, 1 Car. & P. 614, Ames' Cas. Partn. 142, a re-
tired partner, whose name had been permitted to remain on a cart
used in the business, was held liable to one injured by the negli-
gence of the driver. This case has been criticised in Lindl. Partn.
p. 47, and in Bates, Partn. § 102. See, upon the general principle in-
volved, the following cases, none of which, however, were partner-
ship cases: Robb v. Shephard, 50 Mich. 189, 15 N. W. 76; Jackson
v. Pixley, 9 Cush. (Mass.) 490; Hall v. White, 3 Car. & P. 136;
Phillipsburgh Bank v. Fulmer, 31 N. J. Law, 550.

200 Sherrod v. Langdon, 21 Iowa, 518, Burdick's Cases, 112. Where
the tort consists substantially of a breach of a contract of bailment,
which contract was made under such circumstances as to bind the
nominal partner, he may be held liable in an action of tort. Max-
well v. Gibbs, 32 Iowa, 32.

i

t.^r-j'^*^^

CHAPTER II.

CLASSIFICATIONS AND DEFINITIONS.

38-40. Partnerships Classified.

41. Universal Partnerships.

42. General Partnerships.

43. Special or Particular Partnerships.

44. Trading and Nontrading Partnerships.

45. Partners Classified.

Partnerships Classified.

38. Partnerships classified with reference to the nature of
the association are either —

(a) Ordinary partnerships,

(b) Limited partnerships, or

(c) Joint-stocK companies.

39. Partnerships classified with reference to their extent are
either —

(a) Universal partnerships,

(b) Gen|r5lT5al^erships, or

(c) Special or particular partnerships.

40. Partnerships classified wjth reference to their business
are either—

(a) Trading partnerships, or

(b) Nontrading partnerships.

Limited Partnerships and Joint-Stock Companies.

The definition, nature, and incidents of limited partner-
ships and joint-stock companies may be most conveniently ex-

;,; CLASSIFICATIONS AND DEFINITIONS.

plained after a consideration of ordinary partnerships. This
Bubjecl is accordingly reserved for a later chapter.1

S A M E UNIVERSAL PARTNERSHIPS.

41. A universal partnership is one in which the parties
bring into the firm "ailtneir property, of whatever nat-

ure, and employ all their services for the common
benefit.

It lias been said that there is probably no such thing in fact
as a universal partnership, in the sense that everything done,
bought, or sold is to be deemed so done on partnership ac-
count.2 Nevertheless it is generally conceded that such a
partnership is theoretically possible, and several cases have
occurred which were practically universal partnerships.3

Same — General Partnerships.
42. A generaLpartnership is one formed to transact some

general class of business.

1

A general partnership is one whose business includes all
transactions of a particular class, as where several persons
agree to carry on as partners the business of bankers, grocers,
etc. A general partnership may, of course, be formed to

1 See chapter 13, "Limited Partnerships," and chapter 12, "Joint-
Stock companies."

2 Per Story, J., in U. S. Bank v. Binney, 5 Mason, 176, 183, Fed.
Cas. No. 16,791.

3 See Rice v. Barnard, 20 Vt. 479; Gray v. Palmer, 9 Cal. 616;
Lyman v. Lyman, 2 Paine, 11, Fed. Cas. No. 8,628; Gasely v. Sepa-
ratists' Soc, 13 Ohio St. 144; Goesele v. Bimeler, 14 How. (U. S.)
589; Murrell v. Murrell, 33 La. Ann. 1233; Fuller v. Ferguson, 26
Cal. 546.

J/Plri Au^u^^U drb/f*«*s*£^- ^ r^

PARTNERSHIPS CLASSIFIED. 77

carry on several kinds or classes of business. Some of the
definitions to be found in the books define general partner-
ships in terms broad enough to include universal partner-
ships.4 But the above definition gives the correct meaning of
the term.

Same — Special ok Particular Partnerships.

43. A special or particular partnership is one formed for a
{ single transaction.

In some of the books, the term "limited partnerships" has
been applied to partnerships for a single transaction. This
sense of the term must not be confounded with the modern
statutory limited partnership, which of course, is not confined
to a single transaction.5

* See Story, Partn. § 75, and see comments in Bates, Lim. Partn.
§ 1. "They may be divided into general and special or limited part-
nerships. General partnerships are properly such where the par-
ties carry on all their trade and business for their joint benefit and
profit, and it is not material whether the capital stock be limited
or not, or the contributions of the parties be equal or unequal."
Bigelow v. Elliot, 1 Cliff. 32, Fed. Cas. No. 1,399, citing Willet v.
Chambers, Cowp. 814.

5 See post, c. 13, "Limited Partnerships." "Special partnerships
are those formed for a special or particular branch of business, as
contradistinguished from the general business or employment of
the parties, or one of them. When they extend to a single transac-
tion or adventure only, such as the purchase and sale of a particular
parcel of goods, they are more commonly called "limited partner-
ships," but the appellation is indiscriminately applicable to both
classes of cases." Bigelow v. Elliot, 1 Cliff. 32, Fed. Cas. No. 1,399.
To constitute a general partnership, it is enough that the parties
agree to conduct a business, and to share its profit and loss.
Whether the business is of a general nature, or is confined to par-
ticular transactions, the partnership is general. Eldridge v. Troost,.
3 Abb. Prac. (N. S.; N. Y.) 20.

78 CLASSIFICATIONS AND DEFINITIONS.

Same — Trading ami \<>.vi raping Partnerships.

44. A trading or commercial partnership is one whose
business consists in buying or preparing for sale and

selling commodities for

If it does not buy or sell, it is a partnership of employment
or occupation, and not a trading or commercial partnership.7
Thus, a partnership to transact the business of running a
store,8 or dealing in cattle,9 or buying and killing cattle, and
selling the meat,10 or merchant tailoring,11 is a trading part-
nership, while a partnership between attorney a for the prac-
tice of the lawT^or between mere factors and brokers,13 or a
firm ef printers and publishers,14 is a nontrading partnership."

The only purpose of the distinction between trading ancT
nontrading partnerships is to determine how far a partner
has implied power to bind his firm upon commercial paper,
each partner's implied power being limited to acts within the
general scope or course of the partnership business. This
subject will be referred to again in a succeeding chapter.15

e Winship v. Bank of U. S., 5 Pet. (U. S.) 529; Deitz v. Regnier,
27 Kan. 94; Lee v. First Nat. Bank, 45 Kan. 8; Hoskinson v. Eliot,
62 Pa. 393; Smith v. Collins, 115 Mass. 388.

I Lee v. First Nat. Bank, 45 Kan. 8, 25 Pac. 196.

s Walsh v. Lennon, 98 111. 27; Palmer v. Scott, 68 Ala. 380.
» Smith v. Collins, 115 Mass. 388.
10 Wagner v. Simmons, 61 Ala. 143.

II Ah Lep v. Gong Choy, 13 Or. 205.

12 Friend v. Duryee, 17 Fla. Ill; Smith v. Sloan, 37 Wis. 285;
Pooley v. Whitmore, 10 Heisk. (Tenn.) 629; Hedley v. Bainbridge,
2 Adol. & E. (N. S.) 316.

13 Deardorf s Adm'r v. Thacher, 78 Mo. 128; Third Nat. Bank v.
Snyder, 10 Mo. App. 211.

1* Pooley v. Whitmore, 10 Heisk. (Tenn.) 629.

is See post, c. 9, "Rights and Liabilities as to Third Persons."

PARTNERS CLASSIFIED. 79

Partners Classified.

45. The relation of a partner to his firm or to third persons
is often indicated by designating him as —

(a) Ostensible.

(b) Secret. ~~

(c) Active.
(d)S^ngt:

(e) Dormant.

(f) rTominal.

(g) Incoming,
(h) Retiring,
(i) liquidating,
(j) General,
(k) Special.

Ostensible Partners.

An ostensible partner is one who is held out and known as
a partner, — one who exhibits himself to the public as con-
nected with a partnership, and interested in its business.

Secret Partner.

A secret partner is one whose relation to the finn is con-
cealed.

Active Partners.

An active partner is one who takes an active part in the
conduct of the firm business. He may be either a secret or an
ostensible partner.

Silent Partners.

A silent partner is one who takes no active part in the man-
agement of the firm business, and exercises none of the rights
of a partner beyond receiving his share of the profits. He

80 CLASSIFICATIONS AND DEFINITIONS.

may be either a secret or an ostensible partner, though the
term is sometimes thoughl to apply only to secret partners.

Dormant Partners.

A dormant partner is one who is both a secret and silent
partner.16 TTie~term is "often used, however, as meaning

"• Pars. Partn. § 31. A dormant partner takes no part in the con-
trol or management of the partnership business. Cochran v. Ander-
son Co. Nat. Bank, 83 Ky. 44, 47. A dormant partner is interested
in the business of the firm, and participates in the profits, but is
not publicly known in this relation. Oppenheimer v. Clemmons, 18
Fed. 890; Speake v. Prewitt, 6 Tex. 258. A dormant partner is one
whose name is not mentioned in the title of the firm, or embraced
in some general term, as "Company," "Sons," etc. Jones v. Fegely,
4 Phila. (Pa.) 1.

Where the firm name contains the suffix "& Co.," and no provis-
ion is made in the partnership articles that a member whose name
does not appear shall be kept secret, and in fact it is not kept se-
cret, such member is not a dormant partner, and, upon retiring, he
must give express notice to firm customers, even if they did not in
fact know of his membership, the suffix "& Co." indicating an un-
disclosed principal. Elmira Iron & Steel Rolling Mill Co. v. Harris,
124 N. Y. 280, 26 N. E. 541, Burdick's Cases, 398.

"A dormant partner has been variously defined as sleeping, silent,
not known, not acting, one whose name and transactions as a part-
ner are professedly concealed from the world, one who shares in
the profits of a business, but is not known as a member of the firm.
In its strictest sense, it may imply both the quality of secrecy and
inactivity, but it has been held that, to be such, it is not essential
that the dormant partner should wholly abstain from any actual
participation in the business of the firm, or be universally unknown
as bearing a connection with it. He may act in an advisory man-
ner in the general business of the firm, and it is sufficient if he is
not generally known as a partner." Elmira Iron & Steel Rolling
Mill Co. v. Harris, 124 N. Y. 280, 26 N. E. 541, Burdick's Cases, 398,
citing North v. Bloss, 30 N. Y. 374. A dormant partner is one whose
name is not known and does not appear as that of a partner, but
who is in fact a silent partner. Podrasnik v. R. T. Martin Co., 25
111. App. 300. A partnership is dormant when the name or names
of a partner or partners are kept back, — dormant as to all whose
names do not appear in its transactions. The dormant, sleeping,.

PARTNERS CLASSIFIED. Si

merely a secret partner, and sometimes as meaning a silent or
inactive partner, irrespective of whether he is an ostensible or
secret partner. As a matter of fact, there is much confusion
and inaccuracy in the use of the terms "secret," "silent," and
"dormant." 17

Nominal Partners.

A nominal or quasi partner is a person who is apparently
) a r tner,~ out not really one.18

Incoming Partner.

An incoming partner is one who enters a previously exist-
inglmn. But, as will be seen hereafter, me introduction of a
new member into an existing firm operates as a dissolution of
it, and the institution of a new firm.

Retiring Partner.

A retiring partner is one who leaves an existing firm.

Liquidating Partner.

A liquidating partner is the member of a dissolved partner-
ship who winds up its business.

inactive partner may be known by reputation or declaration of his
copartner, but these do not make him an avowed or active one with-
out the avowal and pledge of his name or paper. The principle
which makes a dormant partner liable is that, having an interest
in the profits, which are part of the fund to which a creditor looks
for payment, he shall be bound for claims and losses. When discov-
ered, he is liable as a partner; but then he must be shown to be a
partner by an interest in the subject-matter. Winship v. Bank of
U. S. (1831), 5 Pet. (U. S.) 573-575, Baldwin, J.

it See Pars. Partn. § 31.

is See supra, §§ 32-37, "Partnership as to Third Persons." The
term "ostensible partner" has been used in the sense of "nominal
partner," and vice versa. See Harris v. Crary, 67 Tex. 383. But it
is better to confine the term "ostensible" to one who is really a
partner, and known as such, and to apply the term "nominal" to
one who is not really a partner, but only apparently so.

6

82 CLASSIFICATIONS AND DEFINITIONS.

ml and Special Partners.
The terms "general" and "special" partners have reference
only i" the members of a statutory limited partnership, and
will be considered in that connection. The terms have noth-
ing i" do with the classification of partnerships into general
and Bpecia] partnerships.

CHAPTER III.

CONTRACT OF PARTNERSHIP.

46. General Requisites.

47. Formalities.

48-49. Who may become Partners.

50. Consideration.

51. Purposes of Partnership.

52. Illegal Partnerships.

General Requisites.

46. A contract creating a partnership must conform to all
rules governing contracts in general".

The general principles of the law of contracts are, of
course, fully applicable to contracts of partnership. In this
work, therefore, it is unnecessary to do more than point out
and illustrate a few of the applications of such principles to
the contract of partnership. The construction of contracts
with reference to the question whether or not a partnership is
created has been sufficiently considered in a preceding chap-
ter, on what constitutes a partnership. The construction of
particular provisions in formal contracts, or articles of part-
nership, is reserved for a later chapter.1

Formalities.

47. No particular forms of expression or formalities of exe-
cutiojv^rj&necessary to a valid'contract Of p&rtiifeiphfjT

There are no technical terms or forms of expression which
must be used to order to constitute an ordinary common law
partnership. Any contract which evinces an intention to be

1 See infra, §§ 82, 83.

S4 CONTRACT OF PARTNERSHIP.

joinl proprietors of the profits of the business to be carried
on will constitute a partnership. It is not necessary that
•lie term "partnership," or any similar term, should he used.2
[ndeed, as has been seen, a contract may create a partnership,
though the parties thereto <li<l not contemplate such a result,
or even where they have expressly stipulated that a partner-
ship sin .u 1< 1 not result.8 The contract, of course, may lie
either express, or implied from the acts of the parties.4

ssity of Writing — Statute of Frauds.
In the absence of a statutory provision to the contrary, the
contract may be either oral or written.5 The statute of
frauds, which requires certain classes of contracts to be in

2Bloomfield v. Buchanan, 13 Or. 108, 8 Pac. 912; Marsh v. Davis,
33 Kan. 326, 6 Pac. 612; Johnson v. Carter, 120 Iowa, 355, 94 N. W.
850. It is not necessary to constitute a valid partnership, that the
parties should describe themselves as partners, or that they should
agree to share the losses. Fay v. Waldron (Sup.), 3 N. Y. Supp.
894. The absence of the word "partners" is a circumstance to be
considered in determining whether or not the parties intended to
be partners. Rawlinson v. Clark, 15 Mees. & W. 292.

3 See supra, § 13, "Intention the Real Test."

* A partnership is a voluntary association of two or more persons
for the purpose of lawful trade, and does not need to be established
by demonstration. It may be inferred from facts and circumstances.
Whiting v. Leakin, 66 Md. 255, 7 Atl. 688. Where there is no writ-
ten agreement, the question of partnership or not is to be deter-
mined largely by other conduct of the parties. Hayward v. Barron
(Com. PI.), 19 N. Y. Supp. 383. No express stipulation for provid-
ing the profit and loss is necessary, as that is an incident to the
prosecution of a joint business. Bancroft v. Hambly, 36 C. C. A.
601. "Though there be no express articles of co-partnership, the
obligation of a partnership engagement may equally be implied in
the acts of the parties." Ellison v. Stuart, 2 Pen. (Del.) 179, 43
Atl. 836. "It is true that there were no articles of partnership, nor
written contract defining the interests, rights, and obligations of
the parties, but they are not essential to the existence of a partner-
ship." Jones v. Davies, 60 Kan. 309, 56 Pac. 484.

s Jones v. Davies, 60 Kan. 309, 56 Pac. 484; Marsh v. Davis, 33-

FORMALITIES. 85

writing, does not require a written contract to create a pres-
ent partnership. A contract of partnership is not an agree-
ment for the sale of any personal property or those in action,
within the meaning of the statute.6 The provision of the
statute which requires contracts not to be performed within
a year, to be evidenced by a note or memorandum in writing,
of course, requires a contract for a future partnership to be
in writing, where such partnership is not to commence until
after a year from the date of the contract.7 But, as has been
seen, a contract for a future partnership does not constitute
the parties partners in the meanwhile.s If the agreement is
for a partnership for a longer term than one year, the con-
tract must be evidenced by writing, in order to be binding,9

Kan. 326, 6 Pac. 612; Randel v. Yates, 48 Miss. 685; Bopp v. Fox, 63
111. 543; Smith v. Tarlton, 2 Barb. Ch. (N. Y.) 336; Ellison v. Stuart,
2 Pen. (Del.) 179, 43 Atl. 837; Somerby v. Buntin, 118 Mass. 279;
Simmons v. Ingram, 78 Mo. App. 603; McCabe v. Sinclair (N. J. Eq.),
58 Atl. 412.

6 Coleman v. Eyre, 45 N. Y. 38; Huntley v. Huntley, 114 U. S. 394.
An oral agreement, by which one person is to contribute his in-
choate interest in an invention, and the other furnish the money
necessary to make that invention available in the form of a patent,
and both are to contribute their services to make it remunerative,
is an agreement for a partnership, and not a contract for the sale
of goods, wares and merchandise, within the statute of frauds; and
the patent, when obtained, is in equity, partnership property, in
whosoever name letters patent are taken out. Somerby v. Buntin,
118 Mass. 279.

7 Smith v. Tarlton, 2 Barb. Ch. (N. Y.) 336. See, also, Whipple
v. Parker, 29 Mich. 369. "But even where there was a parol agree-
ment to enter into a partnership at a future day, and specifying the
terms of such copartnership, I apprehend that, if the parties went
into copartnership at the prescribed time, without agreeing upon
any new terms, the former parol agreement would be presumed to
constitute the terms on which such partnership was entered into
and carried on." Smith v. Tarlton, 2 Barb. Ch. (N. Y.) 337.

s See supra, § 24, "Contracts for Future Partnerships."
o Jones v. McMichael, 12 Rich. (S. C.) 176; Morris v. Peckham,
51 Conn. 128; Williams v. Jones, 5 Barn. & Co. 108.

86 CONTRACT OF PARTNERSHIP.

bul it' the parties have acted upon the agreement, and
launched the partnership, they are partners, though, of course,
the provision of the oral contract thai the firm shall continue
for more than a year is no1 binding, and the firm may be dis-
solved al any time.10

The provision of ili<i statute of frauds requiring contracts
for an interest in real property to be evidenced by writing,
dors n,,! require a contrad of partnership to be in writing,
even though the partnership property consists of realty, and
the very purpose of the partnership is to deal in real estate.11
The great weighl of authority supports this view, though
there are authorities to the contrary.12 So far as lands ac-
quired after the formation of the firm, is concerned, the in-
terest of each partner is in the nature of a resulting or con-
structive trust, and it is well settled that such trusts may bo
established by parol evidence,13 the statute of frauds having
no application to such trusts, which are created by operation

10 Morris v. Peckham, 51 Conn. 128; Wahl v. Barnurn, 116 N. Y.
87, 22 N. E. 280; Huntley v. Huntley, 114 U. S. 394.

"Bopp v. Fox, 63 111. 540; Fairchild v. Fairchild, 64 N. Y. 471;
Chester v. Dickerson, 52 Barb. (N. Y.) 349, 54 N. Y. 1, Mechem's
Cases, 20; Bates v. Babcock, 95 Cal. 479, 30 Pac. 605, 29 Am. St. Rep.
133; Flower v. Barnekoff, 20 Or. 132, 25 Pac. 370; Allison v. Perry,
130 111. 9, 22 N. E. 492; Carr v. Leavitt, 54 Mich. 540, 20 N. W. 576;
Richards v. Grinnell, 63 Iowa, 44, 18 N. W. 668, 50 Am. Rep. 727;
Dale v. Hamilton, 5 Hare, 369; Jones v. Davies, 60 Kan. 309, 56 Pac.
484. The reason assigned in many cases for this rule is that real
estate is treated in equity as personal property for all the purposes
of the partnership. Flower v. Barnekoff, 20 Or. 132, 25 Pac. 370.

i-' Raub v. Smith, 61 Mich. 543, 28 N. W. 676; Lefevre's Appeal,
69 Pa. 122; Everhart's Appeal, 106 Pa. 349; Young v. Wheeler, 34
Fed. 98; Smith v. Burnham, 3 Sumn. 435, Fed. Cas. No. 13,019.

13 See cases cited supra, this section, to the effect that the statute
of frauds does not apply. See, also, Forster v. Hale, 5 Ves. 309;
Dale v. Hamilton, 5 Hare, 369, 2 Phil. Ch. 266; Lefevre's Appeal, 69
Pa. 125; Williams v. Gillies, 75 N. Y. 197; Smith v. Tarlton, 2 Barb.
Ch. (N. Y.) 336; Sherwood v. St. Paul & C. Ry. Co., 21 Minn. 127;
Marsh v. Davis, 33 Kan. 326, 6 Pac. 612.

WHO MAY BECOME PARTNERS. 87

of lay mainly for the prevention of fraud. As to lands
"which, by the agreement, are to be contributed by one or
more partners to the common stock at the institution of the
firm, the contract is executed when the relation is entered
into, and the statute of frauds has no application to executed
agreements.14

Who May Become Paetnees.

48. Any personcompetent to contract may make a valid
contract of part.nt

49. There must be at least two, and, in the absence of stat-
ute, there may be any greater number of partners jp^a

Aliens.

Citizens of different countries which are at peace with each
other may be partners, but an alien enemy can not be a part-
ner, and, if war breaks out between the respective countries
of the partners, such partnership is suspended or dissolved.15

"Hunter v. Whitehead, 42 Mo. 524; Personette v. Pryme, 34 N. J.
Eq. 26. In Marsh v. Davis, 33 Kan. 326, 6 Pac. 612, the court said that
it was immaterial whether real estate was bought with partnership
funds for partnership purposes after the formation of the partner-
ship, or whether a part of the real estate was put into the firm as
partnership property at the formation of the firm, if the parties have
acted upon the agreement, and become partners. In either case,
the statute of frauds is not applicable. After the formation of the
partnership, an action between the partners in relation to such lands
would be founded upon an existing ownership in them, and not
upon the contract for an interest in them. Before the formation of
the firm, the only action that could be brought would be for failure
to launch the partnership. Pars. Partn. (4tb Ed.) § 6, note d.

15 McAdams' Ex'rs v. Hawes, 9 Bush (Ky.) 15; Woods v. Wilder,
43 N. Y. 164; New York Life Ins. Co. v. Statham, 93 U. S. 24; Ker-
shaw v. Kelsey, 100 Mass. 561.

CONTRACT OF PARTNERSHIP.

Infants.

An infanl may be a partner, since his contracts are merely
voidable, and not void. So long as he does not avail himself
of the privilege of rescinding his contracts, he has all the
rights and powers of any other partner. He may, however,
up 'ii attaining majority, or at any time before, rescind the
contract, and thus escape all liability. Upon reaching ma-
jority, he may ratify the contract, whereupon he becomes
absolutely liable upon all the contracts of the firm. If he in-
tern!- to disaffirm the contract, he should do so promptly upon
arrival at majority, as otherwise he may be held to have
elected to ratify the contract.10 The infant's interest in the
fimi property remains liable for firm debts, notwithstanding
the infant elects to disaffirm, and thereby escapes personal
liability.17 The adult partners cannot take advantage of
their copartner's infancy to avoid liability. The privilege
is personal to the infant.18 But the fact that the infant
falsely represented himself to be of age is sufficient to entitle
the adult partner to a dissolution.19

Insane Persons.

A contract of partnership, made in good faith with an in-
sane person, in ignorance of his condition, is valid, though it
may be set aside, if the parties can be placed in statu quo.20

10 Continental Nat. Bank v. Strauss, 137 N. Y. 148, 32 N. E. 1066,
Burdick's Cases, 619; Osburn v. Fair, 42 Mich. 134, 3 N. W. 299;
Bush v. Linthicum, 59 Md. 344, Burdick's Cases, 154; Bixler v.
Kresge, 169 Pa. 405, 32 Atl. 414, 47 Am. St. Rep. 920, Burdick's Cases,
115; Mehlhop v. Rae, 90 Iowa, 30, 57 N. W. 650; Vinsen v. Lockard,
7 Bush (Ky.) 458; Goodnow v. Empire Lumber Co., 31 Minn. 468,
18 N. W. 283.

17 Bush v. Linthicum, 59 Md. 344, Burdick's Cases, 154; Yates v.
Lyon, 61 N. Y. 344; Pelletier v. Couture, 148 Mass. 269, 19 N. E. 400,
and cases cited supra, this section.

is Stein v. Robertson, 30 Ala. 286.

19 Bush v. Linthicum, 59 Md. 344, Burdick's Cases, 154.

soBehrens v. McKenzie, 23 Iowa, 333, 92 Am. Dec. 428; Fay v.

WHO MAY BECOME PARTNERS. 89

Insanity of a partner does not ipso facto operate as a disso-
lution of the firm, though it may constitute sufficient grounds
to justify a court of equity in decreeing a dissolution.21

Married Woman.

At common law, a married woman was incapable of enter-
ing into a contract, and therefore of becoming a partner, ex-
where she had a separate estate, or where she was judicially
separated from her husband, or where her husband was an
alien enemy, and abroad.22 By the custom of London, how-
ever, a married woman may be a trader, and contract as if
she were not married,23 and a similar custom prevails in
South Carolina.24 Under modern statutes, which have very
generally removed the disabilities of married women to con-
tract, a married woman may be a partner,25 even with her

Burditt, 81 Ind. 334, 42 Am. Rep. 142; Menkins v. Lightner, 18 111.
282. None of these were partnership cases.

2i Raymond v. Vaughn, 17 111. App. 144, affirmed in 128 111. 256,
21 N. E. 566.

22 Enc. Laws Eng. tit. "Partnership," p. 458; Brown v. Jewett, 18
N. H. 230; McArthur v. Bloom, 2 Duer (N. Y.) 151. A married
woman has not capacity to enter into a general mercantile partner-
ship not connected with or relating to her separate property, and
where she assumes to do so with the consent of her husband, and is
by him assisted in managing and carrying on the business, the hus- /
band, and not the wife, is to be regarded in law as the partner.
Swasey v. Antram, 24 Ohio St. 87. As to the effect of a partnership
entered into during coverture, and continued after the death of the
husband, see Everit v. Watts, 10 Paige, Ch. (N. Y.) 82.

23 Lindl. Partn. p. 77; Beard v. Webb, 2 Bos. & P. 93.
2*Newbiggin v. Pillans, 2 Bay (S. C.) 162; Hobart v. Lemon, 3

Rich. (S. C.) 131. A married woman may become a feme sole trader
in the business of keeping a boarding house. Dial v. Neuffer, 3 Rich.
(S. C.) 78.

25 Vail v. Winterstein, 94 Mich. 230, 53 N. W. 932; Silveu's Ex'rs
v. Porter, 74 Pa. 448; Dupuy v. Sheak, 57 Iowa, 361, 10 N. W. 731;
Orr v. Cooledge, 117 Ga. 195, 43 S. E. 527. But see Vannerson v.
Cheatham, 41 S. C. 327, 19 S. E. 614, wherein it is held that a statute
providing that a married woman's contracts are valid, except those

90 CONTRACT OF PARTNERSHIP.

husband,26 though it La usually held, even under such stat-
utes, thai she cannot enter into partnership with her hus-
band.27 In a recenl and well considered case,278, a distinc-
tion is made between statutes allowing married women to
contract generally and those permitting only contracts as to
separate property. Under the former class of statutes, the
weighl of authority is in favor of the right of a married wo-
man to ciiirr into partnership with her husband.27b

( 'orporaiions.

1 1 i- prima facie ultra vires for a corporation to enter into
a partnership with either another corporation or a natural
person,28 though of course such power may be expressly con-
to answer for the liability of another, does not authorize her to
enter into a partnership, since she would thereby become liable to
answer for the liability of another. This decision seems extremely
doubtful.

2a Suan v. Caffe, 122 N. Y. 308, 25 N. E. 488, Mechem's Cases, 40;
Dressel v. Lonsdale, 46 111. App. 454; Louisville & N. R. Co. v. Alex-
ander, 16 Ky. L. R. 306, 27 S. W. 981; Hoaglin v. Henderson, 119
Iowa, 720, 61 L. R. A. 756. In England, a married woman with a
separate estate may be a partner, even with her husband. Butler
v. Butler, 16 Q. B. Div. 374.

-' Artman v. Ferguson, 73 Mich. 146, 40 N. W. 907, Mechem's Cases,
:;7; Fuller & Fuller Co. v. McHenry, 83 Wis. 573, 53 N. W. 896; Bow-
ker v. Bradford, 140 Mass. 521, 5 N. E. 480; Plumer v. Lord, 5 Allen
(Mass.) 460; Payne v. Thompson, 44 Ohio St. 192, 5 N. E. 654; Mayer
v. Soyster, 30 Md. 402.

2?a Hoaglin v. Henderson, 119 Iowa, 720, 61 L. R. A. 756.

27b Hoaglin v. Henderson, supra; Burney v. Savannah Grocery
Co., 98 Ga. 711, 25 S. E. 915; Lane v. Bishop, 65 Vt. 575, 27 Atl. 499;
Snell v. Stone, 23 Or. 327, 31 Pac. 663; Fuller v. Ferguson, 26 Cal.
547. To the contrary, see Seattle Board of Trade v. Hayden, 4 Wash.
263, 16 L. R. A. 530; Haggett v. Hurley, 91 Me. 542, 40 Atl. 561, 41
L. R. A. 362.

2sGunn v Central R. R., 74 Ga. 509; Aurora State Bank v. Oliver,
62 Mo. App. 390; People v. North River Sugar Refining Co., 121 N.
Y. 582, 24 N. E. 834; New York & S. Canal Co. v. Fulton Bank, 7
Wend. (N. Y.) 412; Morris Run Coal Co. v. Barclay Coal Co., 68 Pa.

WHO MAY BECOME PARTNERS. 91

f erred by its charter.29 So, a corporation may, in further-
ance of the object of its creation, make contracts, though the
effect of the contracts may be to impose upon the company the
liability of a partner.30

Partnerships.

A firm may enter into a contract of partnership with an-
other firm, or with an individual, and, as between the parties
to such contracts, in taking the accounts, making contribu-
tion and distribution, etc., the contracting firms are treated
as entities, and stand on the footing of any other partner.31
But, as the law does not in fact recognize firms as legal en-
tities,32 all the partners in the component firms will be re-
garded as partners in the joint firm, so far as third persons
are concerned, and each will be liable in soli do for the debts
of the joint firm.33

Number of Partners.

"That a partnership must consist of at least two persons
is one of those things which does not need to be established

173; Mallory v. Hanaur Oil-Works, 86 Tenn. 598, 8 S. W. 396;
Fechteler v. Palm Bros. & Co. (C. C. A.), 133 Fed. 462. But see
Catskill Bank v. Gray, 14 Barb. (N. Y.) 471.

National Bank cannot become a partner. Merchants' Nat. Bank
v. Wehrmann, 69 Ohio St. 160, 68 N. E. 1004.

29 Butler v. American Toy Co., 46 Conn. 136; Allen v. Woonsocket
Co., 11 R. I. 288.

'•o Cleveland Paper Co. v. Courier Co., 67 Mich. 152, 34 N. W. 556;
Bissell v. Michigan Southern R. Co., 22 N. Y. 258; Catskill Bank v.
Gray, 14 Barb. (N. Y.) 471; Jones v. Parker, 20 N. H. 31.

si Butler v. American Toy Co., 46 Conn. 136; In re Hamilton, 1
Fed. 800; Simonton v. McLain, 37 La. Ann. 663; Meador v. Hughes,
14 Bush. (Ky.) 652; Bullock v. Hubbard, 23 Cal. 495; Gulick v.
Gulick, 14 N. J. Law, 582; North Pac. Lumber Co. v. Spore, 44 Or.
462, 75 Pac. 890.

32 See infra, c. 4, "Firm as an Entity."

33 Meyer v. Krohn, 114 111. 574, 581, 2 N. E. 495; Beall v. Lowndes,
4 S. C. 258.

92 CONTRACT OF PARTNERSHIP.

by demonstration."84 In the absence of statute, there is no
limit upon the number of persona who may be partners in a
single firm.88

Consideration.

50. The mere agreement of one person to be a partner with
another is a sufficient consideration for the agreement
of such other to be a partner with him upon whatever
terms may be agreed upon."

A contract of partnership must, of course, be supported by
a sufficient consideration.86 But, as mutual promises are
each a sufficient consideration for the other, the mere agree-
ment of one person to be a partner with another is a sufficient
consideration for the agreement of the other to be a partner
with him upon whatever terms may be agreed upon between
them.87 An agreement to be a partner subjects one to the ex-
tensive liabilities of a partner and is a valuable consideration,
"Any contribution in the shape of capital or labor, or any act
which may result in liability to third persons, is a sufficient
consideration to support such an agreement."38 The contri-
butions need not be equal, for the court will not measure flic
quantum of value, but will leave the parties to determine this
for themselves.39 The mere agreement of several persons to
be partners is a sufficient consideration to support a stipula-
tion that some of them shall stand the greater part or all of
the losses.40

■■> Whiting v. Leakin, 66 Md. 255, 7 Atl. 688.

"•-> Pars. Partn. § 14.

Mitchell v. O'Neale, 4 Nev. 504.

37 Coleman v. Eyre, 45 N. Y. 38; Belcher v. Conner, 1 S. C. 88;
Breslin v. Brown, 24 Ohio St. 565; Kimmins v. Wilson, 8 W. Va.
584. But see Mitchell v. O'Neale, 4 Nev. 504.

88Lindl. Partn. p. 63.

30 Per Wigram, V. C, in Dale v. Hamilton, 5 Hare, 393.

loLindl. Partn. p. 63; Geddes v. Wallace, 2 Bligh, 270. But see

PURPOSES OF PARTNERSHIP. 9&

Premium.

Sometimes it is agreed that a person shall pay a sum of
money for the privilege of being admitted as a partner in nn
established business. This sum is called a premium or
bonus, and belongs individually to the prior owner of the
business. In forms no part of the firm assets. In cases of
fraud, and toTal or partial failure of consideration, the prem-
ium may be recovered or apportioned.41

Purposes of Partnership.

51. In the absence of statute, a partnership may be formed
to transact any lawful business for profit.

It has already been seen that associations not having gain
for their object are not partnerships.42 The purpose of
every partnership must therefore be the transaction of some
business for profit. A partnership may be formed for the
purpose of any lawful business, commercial or otherwise, such
as farming, mining, manufacturing, professional occupations,
and the like. It may exist for a single transaction or under-
taking,43 though this has been denied.44 Though at one time

Brophy v. Holmes, 2 Molloy, 1. The admission of a new partner into
an existing firm is sufficient consideration to support an agreement
by the incoming partner to assume existing firm debts. Pars. Partn.
§ 336.

« See, generally, Lindl. Partn. p. 64, and Pars. Partn. § 418.

42 See supra, § 235.

43 Jones v. Davies, 60 Kan. 309, 56 Pac. 484; Spencer v. Jones, 92
Tex. 516, 50 S. W. 118; Yeoman v. Lasley, 40 Ohio St. 190; Hulett
v. Fairbanks, 40 Ohio St. 233; Winstanley v. Gleyre, 146 111. 27, 34 N.
E. 628; Plunkett v. Dillon, 4 Houst. (Del.) 338. To constitute a
partnership, it is not necessary that there be a series of transactions
between the parties, nor that the relation be continued for a long
period of time. It may exist for a single transaction or undertak-
ing. Jones v. Davies, 60 Kan. 309, 56 Pac. 484.

44 Carter v. Carter, 28 111. App. 340; Hurley v. Walton, 63 111. 260.

94 CONTRACT OF PARTNERSHIP.

doubted, it is now settled that a partnership may be formed
for the purpose of buying and selling real estate.45

Same — Illegal Partnerships.

52. A partnership cannot be created for a purpose pro-
hibited by positive law or public policy.

A contract of partnership for any purpose prohibited by
la w or public policy is void.46 Thus, a partnership for the
purpose of smuggling, gambling, making counterfeit money,
aiding alien enemies, regulating prices, stifling competition,

"The agreement here contemplated nothing but a single transaction,
in the profits of which the parties were jointly interested. Nothing
was to be bought by the parties; they were to incur no expenses or
debts; they were merely to perform a particular service with refer-
ence to a single subject, and share the profit. The elements neces-
sary to constitute a 'partnership,' in the legal sense of that term,
are wholly lacking, where the transaction engaged in is but a single
adventure, in which there is no property, and no element of loss."
Gottschalk v. Smith, 54 111. App. 344, citing Hurley v. Walton, 63 111.
260; Fawcett v. Osborn, 32 111. 411; Adams v. Funk, 53 111. 219;
Snell v. DeLand, 43 111. 323. The principal case was affirmed in 156
111. 377, 40 N. E. 937, holding that an agreement by two persons to
obtain from a third person a price for which he will sell his land,
and to jointly and separately exert themselves to sell such land at
an enhanced price, and divide the profit between them, embracing
no other transaction, does not constitute a partnership.

45 Bates v. Babcock, 95 Cal. 479, 30 Pac. 605; Winstanley v. Gleyre,
146 111. 27, 34 N. E. 628; Holmes v. McGray, 51 Ind. 358; Richards
v. Grinnell, 63 Iowa, 44, 18 N. W. 668; Pennypacker v. Leary, 65
Iowa, 220, 21 N. W. 575; Corey v. Cadwell, 86 Mich. 570, 49 N. W.
611; Simpson v. Tenney, 41 Kan. 561, 21 Pac. 634; Hunter v. White-
head, 42 Mo. 524; Chester v. Dickerson, 54 N. Y. 1, Mechem's Cases,
20; Yeoman v. Lasley, 40 Ohio St. 190; Hulett v. Fairbanks, 40 Ohio
St. 233; Flower v. Barnekoff, 20 Or. 132, 25 Pac. 370; Spencer -v.
Jones, 92 Tex. 516, 50 S. W. 118; Canada v. Barksdale, 76 Va. 899;
Sage v. Sherman, 2 N. Y. 417. But see Patterson v. Brewster, 4 Edw.
Ch. (N. Y.) 352.

*cMcGunn v. Hanlin, 29 Mich. 476; Fairbank v. Leary, 40 Wis.

PURPOSES OF PARTNERSHIP. 95

and the like, is illegal and void.47 Partnerships in public
offices are against public policy. 4S Where only some of the
partnership purposes or transactions are illegal, if this part
can be separated from the legal part, the partnership is not
wholly void, but if the two parts can not be separated, the
whole is void.49

Effect of Illegality.

The courts Avill not assist the members of an illegal part-
nership in any way to enforce or carry out their illegal ob-
jects. A suit for an accounting of the partnership business
cannot be maintained.50 Where the business has all been
wound up, it has been held that a partner may maintain an ac-

637; Kelly v. Devlin, 58 How. Prac. (N. Y.) 487; Dunham v. Presby,
120 Mass. 285.

« Powell v. Maguire, 43 Cal. 11; Craft v. McConoughy, 79 111. 346,
Mechem's Cases, 30; Tenney v. Foote, 95 111. 99; Watson v. Murray,
23 N. J. Eq. 257; Gaston v. Drake, 14 Nev. 175; Davis v. Gelhaus,
44 Ohio St. 69, 4 N. E. 593; Morris Run Coal Co. v. Barclay Coal Co.,
68 Pa. 173.

•is Caston v. Drake, 14 Nev. 175; Woodworth v. Bennett, 43 N. Y.
273; Forsyth v. Woods, 11 Wall. (U. S.) 484; Bowen v. Richardson,
133 Mass. 293; Warner v. Griswold, 8 Wend. (N. Y.) 665; Hobbs v.
McLean, 117 U. S. 567; Wolcott v. Gibson, 51 111. 69.

49 Anderson v. Powell, 44 Iowa, 20; Northrup v. Phillips, 99 111.
449; Harvey v. Varney, 98 Mass. 118; Dunham v. Presby, 120 Mass.
285; Lane v. Thomas, 37 Tex. 157; Willson v. Owen, 30 Mich. 474.
See, also, Central Trust & Safe Deposit Co. v. Respass, 112 Ky. 606,
56 L. R. A. 479, where illegal items, for betting, were separated in
the accounting of a partnership for feeding, training and racing
horses.

so Sykes v. Beadon, 11 Ch. Ch. 170; Jackson v. McLean's Ex'rs,
100 Mo. 130; Snell v. Dwight, 120 Mass. 9; Bartle v. Nutt, 4 Pet.
(U. S.) 184; Woodworth v. Bennett, 43 N. Y. 273, Mechem's Cases,
25; Read v. Smith, 60 Tex. 379. Where the partnership was a legal
one, the mere fact that a portion of the profits were derived by cheat-
ing customers will not deprive a partner of his right to an account.
Todd v. Pennington (N. J. Ew. & App.) 21 Atl. 297; Shriver v. Mc-
Cloud, 20 Neb. 474. But compare Northrup v. Phillips, 99 111. 449.

90 CONTRACT OF PARTNERSHIP.

tion !«> recover his share of the assets remaining in the hands
of his copartner,51 but the weight of authority is to the con-
trary.56 As to third persons not connected with the illegality,
the members of an illegal partnership are liable as any other
partner-.

si Brooks v. Martin, 2 Wall. (U. S.) 70; Attaway v. Third Nat.
Bank, 15 Mo. App. 577; McGunn v. Hanlin, 29 Mich. 476; Crescent
Ins. Co. v. Bear, 23 Fla. 50.

6 2Tood v. Rafferty's Adm'rs, 30 N. J. Eq. 254; Wood worth v. Ben-
nett, 43 N. Y. 273; Patterson's Appeal, 13 W. N. C. (Pa.) 154; Hunter
v. Pfeiffer, 108 Ind. 197, 9 N. E. 124; Tenney v. Foote, 95 111. 99;
Morris Run Coal Co. v. Barclay Coal Co., 68 Pa. 173.

CHAPTER IV.

FIRM AS AN ENTITY.

53. At Common Law.
54-55. Limited Recognition as an Entity.

At Commox Law.

53. At common law, a firm is not recognized as a legal
pn^Y_fj^Tt f£Qrn ^F^^^^Frs^iio compose it.

Everyone is familiar with the legal fiction by which a cor-
poration is regarded as a legal person or entity separate and
distinct' from its members or stockholders. The property,
rights, duties, and obligations of a corporation are not the
property, rights, duties and obligations of the stockholders.
With a partnership, the case is exactly reversed. The firm,
as such, is not regarded as having any legal existence1 apart
from the members who compose it. "What is called the prop-
erty of the firm is the property of the individual partners.2

1 Jacaud v. French, 12 East, 317; Bank of Toronto v. Nixon, 4 Ont.
App. 346; Ex parte Corbett, 14 Ch. Div. 122, Burdick's Cases, 134;
Hoare v. Oriental Bank, 2 App. Cas. 589; In re Wakeham, 13 Q. B.
Div. 43; Jones v. Blun, 145 N. Y. 333, 39 N. E. 954. "There is no such
thing as a firm known to the law." Per James, L. J., in Ex parte
Corbett, 14 Ch. Div. 122, Burdick's Cases, 134. In Louisiana, which
derives its jurisprudence from the civil law, a partnership is rec-
ognized as a separate legal entity. Succession of Pilcher, 39 La. Ann.
362, 1 So. 929; Liverpool, B. & R. P. Nav. Co. v. Agar, 14 Fed. 615.

2 "Partnership is but a relation. It is not a person; it is not a
legal being. The real owners of partnership property are the part-
ners." Harris v. Visscher, 57 Ga. 232. A legacy to a firm belongs

7

98 FIRM AS ENTITY.

What are called debts of the firm are the debts of the part-
ners.8 Actions to vindicate the rights of the firm must he
broughl by the individual partners, for such rights are their
rights.4 The firm, as such, can not sue.5 Actions to en-
\''>vcr firm liabilities must be brought against the individuals
composing the firm, for it is the individual partners, and not
the firm, which is liable.6 A partner may be a debtor or
creditor of his copartners, but he cannot, in strictness, be a
debtor or creditor of the firm.7 The firm is not such a legal
entity as may be either a debtor or a creditor. Any change

to the individuals composing the firm at the time the legacy vests.
Stuhbs v. Sargon, 2 Keen, 255. Firm property may be seized on
execution for the private debt of a partner, because it is, in part,
at least, his property. See infra, c. 7.

s The private property of a partner may be seized on execution for
a firm debt, because it is the debt of such partner. See infra, c. 7.

* See infra, c. 10, "Actions."

c By statutes in some states, firms are authorized to sue and be
sued in their firm name. See infra, c. 10.

« See infra, c. 10, "Actions."

- Richardson v. Bank of England, 4 Mylne & C. 171, 172; De Tastet
v. Shaw, 1 Barn. & Aid. 664. A debt between the firm and a partner
cannot be legally enforced until the partnership affairs are settled.
It is merely an item in the partnership accounts, and can be en-
forced against the other partners only upon final settlement. See
infra, c. 10, "Actions." "But though these terms, 'creditor' and
'debtor,' are so used, and sufficiently explain what is meant by the
use of them, nothing can be more inconsistent with the known law
of partnership than to consider the situation of either party as in
any degree resembling the situation of those whose appellation has
been so borrowed. The supposed creditor has no means of com-
pelling payment of his debt; and the supposed debtor is liable to no
proceedings either at law or in equity — assuming always that no
separate security has been taken or given. The supposed creditor's
debt is due from the firm of which he is a partner, and the supposed
debtor owes the money to himself, in common with his partners,
and, pending the partnership, equity will not interfere to set right
the balance between the partners. Indeed, it could not do so with
effect, inasmuch as, immediately after a decree has enforced pay-
ment of the money supposed to be due, the party paying might, in

AT COMMON LAW. 99

in membership destroys the identity of the firm, and, if the
business is carried on, the partners are regarded as constitut-
ing a new firm.8 This nonrecognition of the firm as a legal
person or entity is one of the most marked differences be-
tween partnerships and corporations.9

Limited Recognition as an Entity.

54. For convenience, where only the collective rights and
liabilities of all the partners need be considered, the
firm may be, and is, treated as a legal entity.

55. To a limited extent, statutes in some states deal with a
firmaTa legaTentltjr:

Notwithstanding the nonrecognition of the firm as a dis-
tinct legal entity, it is highly convenient, if not indispensible,
for many purposes, to personify the firm, and this is not im-
proper. In thinking and speaking, it is usual, whenever the
collective rights and liabilities of the partners is the only im-
mediate thing that need be considered, to use the terms
"firm" or "the partnership" as a symbol to designate the ag-
gregate whole, as distinguished from the individual partners.
After the rights, and liabilities of the "firm" as an aggrega-
tion or "entity" are determined, it is easy to interpret the re-
sult in terms of individual rights and liabilities, if necessary.
In other words, the notion of the firm as an entity performs
much the same office in law and business as algebraic symbols
do in mathematics. It is merely a convenient mode of ex-
pression, which simplifies business operations and legal rea-

exercise of his power of a partner, repossess himself of the same
sum." Richardson v. Bank of England, 4 Mylne & C. 171.

s See infra, c. 11, "Dissolution." See Abat v. Penny, 19 La. Ann.
289; Haskins v. D'Este, 133 Mass. 356, Burdick's Cases, 135.

0 Lindl. Partn. p. 112.

100 FIRM AS ENTITY.

soning.10 Accordingly, we find courts and lawyers, as well
as business men, frequently speakig of a firm as a entity, hav-
ing its own property creditors, and the like," bul this is only
in the sense just explained, and means no more than that the
partners, as Buch, have certain special rights and liabilities^
which must be worked out through their partnership rela-
tion.1- In keeping partnership accounts, or in marshalling
assets of an insolvent firm, it is constantly regarded as an en-
tity.13 Business men generally regard a firm as an entity,
much as the law regards a corporation, and, for this reason,
the view that a firm is an entity is often called the "mercan-
tile/' as distinguished from the "legal," view.

Statutory Recognition of Firm as Entity.

The tendency of legislation and decision is in the direction
of a wider recognition of the character of the firm as an en-
tity. Statutes in many states permit firms to sue and be
sued in the firm name. Property of the firm is sometimes

10 In Pooley v. Driver, 5 Ch. Div. 460, Sir. George Jessel, speaking
of the partners as agents, said: "You cannot grasp the notion of
agency, properly speaking, unless you grasp the notion of the exist-
ence of the firm as a separate entity from the existence of the part-
ners."

ii Walker v. Wait, 50 Vt. 668; Curtis v. Hollingshead, 14 N. J.
Law, 403, Burdick's Cases, 285; In re Haine's Estate, 176 Pa. 354,
35 Atl. 237; Burdick's Cases, 482; Meily v. Wood, 71 Pa. 488; Cross
v. Burlington Nat. Bank, 17 Kan. 336; Robertson v. Corsett, 39 Mich.
777; Fitzgerald v. Grimmell, 64 Iowa, 261, 20 N. W. 179; Henry v.
Anderson, 77 Ind. 361.

i2Meehan v. Valentine, 145 U. S. 611, 623, Burdick's Cases, 80,
Mechem's Cases, 103; Bank of Buffalo v. Thompson, 121 N. Y. 280,
24 N. E. 473, Burdick's Cases, 286.

is Jones v. Blun, 145 N. Y. 333, 39 N. E. 954; In re Haine's Estate,
176 Pa. 354, 35 Atl. 237, Burdick's Cases, 482. In keeping partner-
ship accounts, the firm is made debtor to each partner for what he
brings into the stock, and each partner is made debtor to the firm
for all that he takes out of the stock. Lindl. Partn. p. 110.

LIMITED RECOGNITION.

101

assessed for taxation as that of the firm, instead of as that of
the individual members. Chattel mortgages executed by a
firm may be filed at its principal place of business.14

i4 Paige, Cas. Partn. p. Ill, note; Hubbardston Lumber Co. v.
Covert, 35 Mich. 255; Robinson v. Ward, 13 Ohio St. 293; Williams
v. City of Saginaw, 51 Mich. 120, 16 N. W. 260; Stockwell v. In-
habitants of Brewer, 59 Me. 286; Hoadley v. County Commissioners,
105 Mass. 519.

CHAPTER V.

FIRM NAME AND GOOD WILL.

56. Necessity of Firm Name.
57-58. Use and Purpose of Firm Name.
59-60. What Name may be Adopted.

Necessity of Firm Name.
56. It is not necessary that a firm should have a firm name.

Although persons forming a partnership usually adopt a
firm name under which to transact the partnership business,
it is not at all essential that they should do so. A partner-
ship may, and frequently docs, exist and do business with-
out any firm name.1 The law frequently declares persons
to be partners as the legal result of a contract between them,
although they had not supposed that they were partners, and,
of course, had not adopted a firm name.2 As has been seen,
the firm is not an entity, but its property and business is the
property and business of the individuals who compose it.
There is, therefore, nothing to prevent the partners from
transacting the partnership business in their own individual
names, if they see fit.3

1 Ontario Bank v. Hennessey, 48 N. Y. 545; Haskins v. D'Este, 133
Mass. 356, Burdick's Cases, 135; Kitner v. Whitlock, 88 111. 513;
Pursley v. Ramsey, 31 Ga. 403; Meriden Nat. Bank v. Gallaudet, 120
N. Y. 298, 24 N. E. 994; Johnson v. Carter, 120 Iowa, 355, 94 N. W.
850.

- See chapter 1, "What Constitutes a Partnership."

3 McGregor v. Cleveland, 5 Wend. (N. Y.) 475; Kitner v. Whitlock,

USE AND PURPOSE OF. 103

Use and Purpose of Firm Name.

57. A firm name is used as a convenient symbol to desig-
nate all the partners collectively, and show that the
transaction was intended as a firm, and not an individ-
ual, transaction.

58. Where there is a firm name, it should be used in all the.
business transactions of the firm except —

Exception — Conveyances of real property.

Although a partnership may exist without a firm name,
even where there are formal articles of partnership, the con-
venience of having a firm name- is so great as to be almost a
necessity. The convenience, if not the necessity, of consider-
ing the firm as an entity for certain purposes, has already
been pointed out. The firm name is the symbol of this no-
tional enjity.4 As a general rule, where a firm name has
Been adopted, all the partnership business may and should be
transacted in the firm name. The use of a firm name raises
a prima facie presumption that there is a partnership, and
that the transaction was a partnership transaction.5 Con-

88 111. 513; Getchell v. Foster, 106 Mass. 42; Austin v. Williams, 2
Ohio, 61; Crozier v. Kirker, 4 Tex. 252, 51 Am. Dec. 724.

* The firm name is simply a convenient abbreviation of the indi-
vidual names of all the partners, and, when used, has the same ef-
fect as if no firm name had been adopted, and the name of each
partner had been signed in full as a partner. Haskins v. D'Este,
133 Mass. 356, Burdick's Cases, 135.

"Haskins v. D'Este, 133 Mass. 356, Burdick's Cases, 135; Ferris
v. Thaw, 5 Mo. App. 279; Whitlock v. McKechnie, 1 Bosw. (N. Y.)
427; Armstrong v. Robinson, 5 Gill & J. (Md.) 412; Charman v.
Henshaw, 15 Gray (Mass.) 293. But compare Brennan v. Pardridge,
67 Mich. 449. But in Robinson v. Magarity, 28 111. 423, it was held
that there is no presumption that a firm name includes more than
one person. The signing of the firm name to a promissory note by

104 FIRM NAME.

veyances of real property constitute a notable exception to
this rule. "The Legal title to real estate can beheld only by
a person or a corporate entity which is deemed such in law;
and therefore a partnerrship can not, as such, take and hold
such Legal title."8 Bu1 "where the style of a partnership is
inserted as grantee, ami it contains the name or names of
one or more of the partners, there is no reason why the title
should no1 vest in the partners so named, and the authorities
are to the effect that it would."7 Of course, such partner
would hold the title in trust for the benefit of all the partners.
Ordinarily, where the partners have adopted a firm name,
one partner has no power to bind the firm by contracts exe-
cuted in any other name;8 but if all the partners join in the
contract, they may bind the firm in their idividual names,
even though there is a firm name,9 and perhaps even one part-

a member of the firm makes the note prima facie the note of the
co-partnership, and binds all the members of the firm. Lamwersick
v. Boehmer, 77 Mo. App. 136. An estimate submitted for a public
contract purported by its title to be made by W. & D., under the
name and style of "D., W. & Co." It was subscribed by each in-
dividual name, and also by the firm name. It was held that it was
to be treated as a partnership act, and not as that of individual part-
ners. People v. Croton Aqueduct Board, 5 Abb. Prac. (N. Y.) 316,
6 Abb. Prac. (N. Y.) 42, 26 Barb. (N. Y.) 240.

eGille v. Hunt, 35 Minn. 357, 29 N. W. 2; Adams v. Church, 42
Or. 270, 70 Pac. 1037, 95 Am. St. Rep. 740. See, also, Tidd v. Rines,
26 Minn. 201, 2 N. W. 497.

i Gille v. Hunt, 35 Minn. 357, 29 N. W. 2. See, also, chapter 7,
"Partnership Property."

s Gordon v. Bankard, 37 111. 147; Tilford v. Ramsey, 37 Mo. 563;
Kirby v. Hewitt, 26 Barb. (N. Y.) 607; Palmer v. Stephens, 1 Den.
(N. Y.) 471; McLinden v. Wentworth, 51 Wis. 170, 8 N. W. 118, 192;
Clark v. Houghton, 12 Gray (Mass.) 38. A receipt signed by one
partner in his own name is binding upon the firm. Byington v.
Gaff, 44 111. 510; Brown v. Lawrence, 5 Conn. 397; Bisel v. Hobbs.
6 Blackf. (Ind.) 479. The execution of a mortgage of personal prop-
erty of a partnership by one partner in his individual name passes
no title. Clark v. Houghton, 12 Gray (Mass.) 38.

oKitner v. Whitlock, 88 111. 513; Iddings v. Pierson, 100 Ind. 418;

USE AND PURPOSE OF. 105

ner could bind the firni by signing the true names of all the
partners.10 Where there is no firm name, it is not necessary
to use the names of all the partners, for a principal is bound
by contracts made in the name of the agent.11 A partner
may use his own name, and bind the firm,12 though, in such
a case, the contract would be prima facie the individual con-
tract of such partner, and it would have to be shown that it
was a partnership matter, in order to bind the firm, whereas,
if a firm name had been used, the contract would have been
prima facie a firm obligation.13 Any name will bind the
firm, where it appears that such was the intention.14 A part-
nership may have several names, in which case it is bound by
contracts made in either name.15 The fact that the same per-

McGregor v. Cleveland, 5 Wend. (N. Y.) 475; Patch v. Wheatland,
8 Allen (Mass.) 102; Crouch v. Bowman, 3 Humph. (Tenn.) 209;
Grollman v. Lipsitz, 43 S. C. 329, 21 S. E. 272.

io Per Maule, J., in Norton v. Seymour, 3 C. B. 794. In McGregor
v. Cleveland, 5 Wend. (N. Y.) 475, F. C. and R. C. being in partner-
ship, F. made a note signing it "F. C. and R. C," coupling the two
names together. This was held sufficient, as a partnership signature,
to bind R., there being no proof as to what was the style of their
firm, except that in two instances the name of "F. & R. C." was used.

n See, also, infra, this section.

12 Sage v. Sherman, 2 N. Y. 417; Ontario Bank v. Hennessey, 48
N. Y. 545. The firm is bound where a partner signs his own name,
and adds the suffix "& Co." Austin v. Williams, 2 Ohio, 61; Drake
v. Elwyn, 1 Caines (N. Y.) 184. See, also, Baring v. Crafts, 9 Mete.
(Mass.) 380.

i3 Macklin's Ex'r v. Crutcher, 6 Bush (Ky.) 401. See, also, supra,
this section.

Where a note is executed by and in the name of one partner, if
the lender did not know of the partnership, or if the money was
loaned on the individual credit of the maker of the note, the fact
that the money was applied to the business of the firm does not make
it a firm debt. National Bank v. Ingraham, 58 Barb. (N. Y.) 290.

i* Holland v. Long, 57 Ga. 36; Brown v. Pickard, 4 Utah, 292;
Kinsman v. Castleman, 1 T. B. Mon. (Ky.) 210.

is Hunt v. Semonin, 79 Ky. 270; Moffat v. McKissick, 8 Baxt.
(Tenn.) 517; Michael v. Workman, 5 W. Va. 391. See, also, Mc-
Gregor v. Cleveland, 5 Wend. (N. Y.) 475.

10G FIRM NAME.

sons, as partners, conduct their business at different places
under different names, does not constitute them partners in
different firms. The partners are the firm, and they are
hound by contracts in either name.10 So, by consent or by
acquiescence in the use of a name other than the one origin-
ally adopted, a partner may be authorized to bind the firm
in such manner.17 Where the firm has received the benefit
of a contract made on its credit, it is bound, no matter what
name is used.18

What Name May be Adopted.

59. In the absence of statutory regulation, the partners may
adopt any name they see fit as a firm name.

60. In several states, statutes exist regulating, to some ex-

tent, the use of firm names.

In Absence of Statute.

Unless restained by statute, the partners may adopt any
name they please as a firm name.19 The name is wholly a

10 Campbell v. Colorado Coal & Iron Co., 9 Colo. 60; "Wright v.
Hooker, 10 N. Y. 51; Anderson v. Norton, 15 Lea (Tenn.) 14; In re
Williams, 3 Woods, 493, Fed. Cas. No. 17,707.

1- Palmer v. Stephens, 1 Den. (N. Y.) 471; Mifflin v. Smith, 17
Serg. & R. (Pa.) 165; Williamson v. Johnson,' 1 Barn. & C. 146; Folk
v. Wilson, 21 Md. 538.

is Miner v. Downer, 20 Vt. 466; Macklin's Ex'r v. Crutcher, 6 Bush.
(Ky.) 401; Morse v. Richmond, 97 111. 303; Bancroft v. Haworth,
29 Iowa, 462; Farmers' Bank v. Bayliss, 41 Mo. 274; Weaver v. Tap-
scott, 9 Leigh (Va.) 424. It is bound by a contract made in the
name of one partner, if the credit was extended tto the firm and not
solely to such partner. Van Reimsdyk v. Kane, 1 Gall. 630, Fed.
Cas. No. 16,872. So, it is bound where the partner signs his own
name, with the addition of "as trustee," to an authorized contract.
Morse v. Richmond, 97 111. 303.

10 Manhattan Brass & Mfg. Co. v. Sears, 45 N. Y. 797; Crawford v.
Collins, 45 Barb. (N. Y.) 269; Nichols v. White, 41 Hun (N. Y.) 152;

WHAT MAY BE ADOPTED. Iu7

matter of convention.20 It may be a purely fanciful name.21
It may contain some or all of the names of the actual part-
ners, or it need not contain any, or it may contain the names
of persons who are not partners.22 The name of one partner*—
rifice much of the convenience of having a firm name, as it
may be used as a firm name,23 though this would seem to sac-
Maugham v. Sharpe, 17 C. B. (N. S.) 443, Burdick's Cases, 160;
Wright v. Hooker, 10 N. Y. 51; Edgerton v. Preston, 15 111. App. 23;
Holbrook v. St. Paul F. & M. Ins. Co., 25 Minn. 229; Pollock, Partn.
art. 11.

20 Edgerton v. Preston, 15 111. App. 23.

2iLauferty v. Wheeler, 11 Daly (N. Y.) 194; Gay v. Seibold, 97
N. Y. 472; Kahn v. Thomson, 113 Ga. 957, 39 S. E. 322.

22 Shain v. Du Jardin (Cal.) 38 Pac. 529, Burdick's Cases, 138;
Pollock, Partn. art. 11. A partnership may be called the "Union
Towing Co.," and the partners may sue in their individual names
upon a contract made with them in that name. Crawford v. Collins,
45 Barb. (N. Y.) 269, 30 How. Prac. (N. Y.) 398.

"Partnerships are generally carried on in the names of the part-
ners, and, when only one name is used, the words 'and company'
are usually annexed to indicate that other persons are interested
in the business. Partnerships are sometimes carried on under the
names of persons who are dead, but who, in their lifetime, had es-
tablished an extensive business, and a high reputation for integrity
and fidelity in trade. Any name assumed and used by persons doing
business together in the relation of partners becomes a legitimate
name and style of the firm, although it may not contain the indi-
vidual name of any of the partners." Oppenheimer v. Clemmons,
18 Fed. 887.

23 Bank of Rochester v. Monteath, 1 Den. (N. Y.) 402; Wright v.
Hooker, 10 N. Y. 51; Palmer v. Stephens, 1 Den. (N. Y.) 471; Kirk
v. Blurton, 9 Mees & W. 284; Manufacturers' & Mechanics' Bank v.
Winship, 5 Pick. (Mass.) 11; Winship v. Bank of U. S., 5 Pet. (U. S.)
529. Where the members of a copartnership agree that the business
of the concern shall be carried on by and in the name of the copart-
ners, such name, for the purpose of the business of the firm, is its
copartnership name, and by it the several members are bound. So,
where the copartners agree that the business shall be carried on by
and in the name of an individual not himself interested, his name
is the copartnership name, and is binding upon the firm when used
in its business. Bank of Rochester v. Monteath, 1 Den. (N. Y.) 402.

105 FIRM NAME.

would be necessary to show thai a contract in such name was
made on behalf of the firm, and on its credit, in order to bind
the firm; it being prima facie the individual contract of the
partner in whose name it was made.24

Statutory Regulation.

Statutory provisions regulating the use of firm names exist
in manv states.23 In some states, it is forbidden by statutes
to use, in the firm name, the name of a former partner with-
out his consent,26 or, more generally^ the name of any one
no1 a partner, or the suffix "& Co.," unless such suffix stands
for an actual partner, who is not otherwise named.27 So,
also, the use of a name appropriate to a corporation is some-

-• Macklin's Ex'r v. Crutcher, 6 Busk (Ky.) 401; Oliphant v.
Mathews, 16 Barb. (N. Y.) 608; Mechanics' & Farmers' Bank v.
Dakin, 24 Wend. (N. Y.) 411. Where the firm name is the indi-
vidual name of one partner, a note execute by and in the name of
such partner is prima facie his individual obligation. National
Bank v. Ingraham, 58 Barb. (N. Y.) 290. Bills drawn upon and
accepted by the partner whose name is so used will be recoverable
against the firm, in the absence of proof that such partner also car-
ried on business on his private account. Bank of Rochester v. Mon-
teath. 1 Den. (N. Y.) 402, followed by Wright v. Hooker, 10 N. Y.
51. To same effect, Palmer v. Stephens, 1 Den. (N. Y.) 471.

Where no firm name is adopted, but the partners intend that all
the business of the firm shall be done in the name of one partner,
transactions by such partner on joint account, and within the au-
thority confided to him, are binding upon all, even if his agency is
not disclosed to the persons who whom he deals. Getchell v. Foster,

106 Mass. 42. v
-*•> See the codes and statutes of the various states. See, also, Yale A

v. Taylor Mfg. Co., 63 Miss. 598; Loeb v. Morton, 63 Miss. 280; Quin .)
v. Alyles, 59 Miss. 375. — —

sc-Arnstaedt v. Blumenfeld, 13 Daly (N. Y.) 354; Rogers v. Tain-
ror, 97 Mass. 291; Sohier v. Johnson, 111 Mass. 238. A former part-
ner is entitled to an injunction to prevent the use of his name, and
to compensation for any loss suffered, but not to an account of the
profits made from the unauthorized use of his name. Lawrence v.
Hull, 169 Mass. 250, 47 N. E. 1001.

-- Swords v. Owen, 43 How. Prac. (N. Y.) 176; Kennedy v. Budd,
.5 App. Div. (N. Y.) 140; Wolfe v. Joubert, 45 La. Ann. 1100, 13 So.

WHAT MAY BE ADOPTED. lO'J

times prohibited.28 Firms doing business under fictitious
names, or names not showing the names of the partners, are
sometimes required by statute to make and file with a desig-
nated officer a certificate stating the names and residences of
all the partners.20 The object of these statutory regulations
is the prevention of fraud upon persons dealing with the
firm, and such statutes should not be extended further than
necessary for this purpose.30

Exclusive Right of Firm to Trade Name.

Where a particular name under which a business is carried
on by any person, firm, or company has become associated
with and appropriated to that business, no other person may
carry on a like business under the same name, or a name
only colorably different therefrom, in a manner calculated to
deceive customers by leading them to believe that they are
dealing with such person, firm, or company.31

806; Zimmerman v. Erhard, 83 N. Y. 74, 38 Am. Rep. 396; Lunt v.
Lunt, 8 Abb. N. C .(N. Y.) 76; Sparrow v. Kohn, 109 Pa. 359, 2 Atl.
498.

28 See Hazelton Boiler Co. v. Hazelton Tripod Boiler Co., 142 111.
494, 30 N. E. 339; Pollock, Partn. art. 10.

29 Pendleton v. Cline, 85 Cal. 142, 24 Pac. 659; Swope v. Burnbam,
6 Okl. 736, 52 Pac. 924. The firm name, "Hirsh Bros.," is not a
fictitious name, and sufficiently designates tbe persons constituting
the partnership, and hence is not within the statute. Cochran v.
Hirsch Bros., 4 Ohio N. P. 34.

30 Wood v. Erie Ry. Co., 72 N. Y. 196; Thompson v. Gray, 11 Daly
(N. Y.) 183; Gay v. Siebold, 97 N. Y. 472; Kennedy v. Budd, 5 App.
Div. (N. Y.) 140; Sparrow v. Kohn, 109 Pa. 359, 2 Atl. 498. But
compare Lane v. Arnold, 13 Abb. N. C. (N. Y.) 73. The intent of
the statute is to prevent a firm from inducing a false credit on the
strength of an unauthorized name, but not to prevent the giving of
credit, nor to furnish a debtor of an offending firm with a defense.
Wolfe v. Joubert, 45 La. Ann. 1100, 13 So. 806; Kennedy v. Budd, 5
App. Div. (N. Y.) 140.

8i Pollock, Partn. art. 11. The principle stated in the text is not
peculiar to the law of partnership. It belongs more properly to that
branch of the general law of ownership which deals with trade-
marks and other analogous rights. Id.

HO FIRM NAME.

Goodwill.

While the good will of a partnership embraces more than
the right to use the firm name, it differs little in other res-
pects from the good will of individuals, which is beyond the
scope of the present work.32 On dissolution the right of a
retiring partner to inaugurate a competing business depends
on the contract of the parties, contained in the articles of
partnership or subsequently made to the same extent as if
the partnership relation had never existed.

■'•'- Partnership good-will and the means of making it productive
after the death of a partner is discussed in a monographic note to
Slater v. Slater, 96 Am. St. Rep. 605, 175 N. Y. 143, 60 N. E. 934.

The points relating to the good-will of a partnership business are
summarized by Lindley on Partnership (6th Ed. p. 445) as follows:
"The salable value of the good-will of a partnership business, what-
ever that value may be, must be considered as belonging to the
firm, unless there is some agreement to the contrary, and it follows
from this: (1) That, if a firm is dissolved and there is no agreement
to the contrary, the good-will must be sold for the benefit of all the
partners, if any of them insist on such sale. Pawsey v. Armstrong,
IS Ch. Div. 698, Burdick's Cases, 90; Bradbury v. Dickens, 27 Beav.
53. (2) That, so far as possible, having regard to the right of every
partner to carry on business himself, the court will, on a dissolution,
interfere to protect and preserve the good-will until it can be sold.
See Turner v. Major, 3 Giff, 442. (3) That, if a partner has himself
obtained the benefit of the good-will, he can be compelled to account
for its value, i. e., for what it would have sold for, he being himself
at liberty to compete in business with the purchaser. Smith v.
Everett, 27 Beav. 446; Mellersh v. Keen, 27 Beav. 236, 28 Beav. 453."

In case of the death of a partner, there is no survival of the good-
will, but if the surviving partner carries on the business, he must
account to the representatives of the deceased partner for the value
of the good-will. Dougherty v. Van Nostrand, 1 Hoff. Ch. (N. Y.) 68;
Rammelsberg v. Mitchell, 29 Ohio St. 22; Holden v. McMakin, 1
Pars. Sel. Cas. (Pa.) 270. See Woerner's Admn. (3d Ed.) § 127.
YvHien a partner retires from the business, assenting to the retention
or the place of business by the other partners, and the future con-
duct of the business by them under the old name, the good-will re-
mains with them as a matter of course. Menendez v. Holt, 128 U. S.

USE OF FIRM NAME. HI

Use of Firm Name After Dissolution.

6oa. The right to use the firm name is a part of the assets.

It does not inure to a continuing or surviving partner,

but is to be accounted for as an asset.
6ob. It dies with the last surviving partner and does not

pass to his personal representative.
6oc. A continuing partner having purchased the good will

is entitled to the exclusive use of the firm name.
6od. In the absence of any agreement as to good will either

partner may use the firm name in any manner which

does not involve the other in liability.

It was at one time held that the good will in the firm name
descended to the surviving partner on principles of joint ten-
ancy,33 but it is now well settled that it is partnership prop-
erty in which the estate of a deceased partner is entitled to
share, and for which a retiring partner is entitled to com-
pensation.34

514, 522. As a general rule, and in the absence of express contract,
there is not, in a professional partnership, as between solicitors, any
partnership asset which is capable of being sold or valued as the
good-will of the partnership business. Arundell v. Bell, 52 L. J. Ch.
537, 49 Law Times (N. S.) 345, 31 Wkly. Rep. 477, 19 Eng. Rul. Cas.
€57. This accords with the view expressed by Judge Story: "It
seems that good-will can constitute a part of the partnership effects
or interests only in cases of mere commercial business or trade, and
not in cases of professional business, which is almost necessarily
connected with personal skill and confidence in the particular part-
ner." Story, Partn. (7th Ed.) § 99. And in McCall v. Moschcowitz,
10 N. Y. Civ. Proc. R. 107, the court said that the good-will of a
millinery business, which depends largely upon the skill of one of
the partners, is no more the property of the copartnership or the
subject of sale than would be the good-will of an attorney's busi-
ness or that of an artist.

33 Hammond v. Douglass, 5 Ves. 539.

a* Piatt v. Piatt, 42 Conn. 330; Dougherty v. Van Nostrand. 1 Hoff.
Ch. (N. Y.) 68; Rammelsberg v. Mitchell, 29 Ohio St. 22; Slater v.

1 i 2 USE OF FIRM NAME.

It is, however, so connected with the partnership that it
dies with the last surviving1 partner, and does not pass to his
personal representative.85

On the retiremeril of a partner without any agreement as
to good will, either lias the right to use the firm name in any
manner not involving the other in liability.30 But the good
will in the tinn name being as has been seen an asset, if the
continuing partner purchase it as such he will be protected in.
its exclusive use.37

Subject to the limitation that he shall not use it in such-
manner as to lead the public to believe that the retiring part-
ner is still connected with the firm,38 a surviving partner is,,
of course, entitled to the firm name while settling the affairs
of the late partnership.39 And if he continues the business
he stands in the same position as a continuing partner.40

Slater, 175 N. Y. 143, 60 N. E. 934, 96 Am. St. Rep. 605, 61 L. R. A.
796. See, however, Kirkman v. Kirkman, 20 Misc. 211, 45 N. Y.
Supp. 377, which seems to draw a distinction between good-will and
right to use firm name.

35 Fisk v. Fisk, 77 App. Div. 83, 79 N. Y. Supp. 37.

36Burchell v. Wilde, 82 Law T. (N. S.) 576; Cottrell v. Babcock
Printing Press Mfg. Co., 54 Conn. 122; Banks v. Gibson, 34 Beav.
566.

37 Rogers v. Taintor, 97 Mass. 291; Adams v. Adams, 7 Abb. N. C.
(N. Y.) 292. And see Steinfeld v. National Shirt Waist Co., 99 App.
Div. 286, 90 N. Y. Supp. 964. "Upon the expiration of a partnership
between two persons, the partner who has purchased the good-will
and assets of the business under the terms of the articles of partner-
ship can restrain his former partner from soliciting the customers
of the old firm, although the articles contain a proviso that nothing
therein contained shall prevent either partner from starting a sim-
ilar business in the neighborhood after the expiration of the part-
nership. Such a proviso only expresses what the law would have
implied." Gillingham v. Beddow, 69 Law J. Ch. 527, 2 Ch. Div.
[1900] 242, 82 Law J. (N. S.) 791, 64 J. P. 617.

38 Hallett v. Cumston, 110 Mass. 29; McGowan Bros. Pump & Mach~
Co. v. McGowan, 22 Ohio St. 370.

so Commercial Nat. Bank v. Proctor, 98 111. 558.
40 Bank v. Gibson, 34 Beav. 566.

CHAPTER VI.

CAPITAL OF FIRM.

61. Definition and Nature.

62. What may be Contributed.
63-65. Rights of Partners.

Definition and ^Nature.

6i. The capital of a firm is the aggregate of the amounts to
be contributed by the partners as the basis of beginning
or continuing the partnership business.1

By the capital of a partnership is meant the aggregate of
the sums contributed by its members for the purpose of com-
mencing and carrying on the partnership business, and in-
tended to be risked by them in that business.2 Partnership
capital, of course, belongs to the firm, or all the partners
jointly and is partnership property,3 but the two terms, "part-
nership capital," and "partnership property," are not syn-

i Bates, Partn. § 251.

2Lindl. Partn. p. 320; Topping v. Paddock, 92 111. 92. A premium
paid as a consideration for admission to a business as a partner is
not a contribution to capital. Evans v. Hanson, 42 111. 234.

sTaft v. Schwamb, 80 111. 289, Burdick's Cases, 577; Nutting v.
Ashcroft, 101 Mass. 300; Clements v. Jessup, 36 N. J. Eq. 569; Malley
v. Atlantic F. & M. Ins. Co., 51 Conn. 22; Smith v. Small, 54 Barb.
(N. Y.) 223; Whitcomb v. Converse, 119 Mass. 38, Burdick's Cases,
575, Mechem's Cases, 492; Hiscock v. Phelps, 49 N. Y. 97; Clark's
Appeal, 72 Pa. 142. As to the nature of a partner's interest in firm
property, whether as joint tenant, tenant in common, or otherwise,
see infra, c. 7.

8

114 CAPITAL OF FIRM.

onymous, and ii is important to distinguish between them.
Partnership property includes everything belonging to the

tii-iii, and its amount may vary from day to day, while the
partnership capital is a sum fixed by the agreement of the
partners, and does uo1 vary, though of course it may he im-
paired by losses. The capital of each partner is not necess-
arily the same as such partner's share of the firm assets, for
this share may be either greater or less than his capital, ac-
cording to whether the business has resulted in profits or
losses while the capital as has been said, always remains
fixed.4 "Moreover, the capital of each partner is not neces-
sarily the amount due to him from the firm, for not only may
he owe the firm money, so that less than his capital is due
him, but the firm may owe him money in addition to his cap-
ital, e. g., for money advanced by him to the firm by the way
of loan, and not intended to be wholly risked in the busi-
ness. °

What May be Contributed.

62. Partnership capital may consist of anything^ of value
which the, partners agree TcTcontribute and receive as"
capital.

The contributions of the different partners to the capital
of the firm are governed wholly by the agreement between
them. The contributions may be cither in money or real or
personal property, or some partners may contribute money,

* Undrawn and accumulated profits do not constitute capital.
Dean v. Dean, 54 Wis. 23, 11 N. W. 239. But see Raymond v. Put-
nam, 44 N. H. 160, wherein undrawn profits were allowed to be
added to the original capital. The articles of partnership in this
case expressly provided that any partner might either increase or
diminish his capital at pleasure.

s Lindl. Partn. p. 320.

RIGHTS OF PARTNERS. 115

and some property. Instead of property, the mere use of
property owned by one or more partnrs individually, may be
.contributed as capital.6 The contributions of the different
partners may be equal or unequal, or some may contribute
nothing whatever to the capital.7 It is sometimes said that a
partner's capital may consist of his time, labor, and skill in
the partnership business. This may, indeed, form the con-
sideration for the contract of partnership between him and
the other partners, but it cannot properly be called capital,
and it gives him no right in the ultimate distribution of the
capital between the partners.8 In determining the amount
of a partner's contribution, any incumbrances or liens thereon
must be taken into account.9

Rights of Paetnees.

63. The capital of a partner cannot be either increased or
diminished during trie continuance of the partnership,
without the consent of all the partners.

64. Upon dissolution, the capital is to be returned to the
partners contributing it, in the proportions in which it
was contributed.

65. Where there is nothing to show the amount, the various
contributions will be presumed to have been equal.

6 Murphy v. Warren, 55 Neb. 215, 75 N. W. 573. "There can be no
doubt, in view of the numerous decisions to that effect, that the cap-
ital of a firm 'may consist of the mere use of the property owned by
one member of the firm.' " Whiting v. Leakin, 66 Md. 255, 7 Atl.
688, citing Citizens' Fire Ins. etc. Co. v. Doll, 35 Md. 106; Ward v.
Thompson, 22 How. (U. S.) 330.

1 The mere agreement to be a partner, and as such subject to the
claims of third persons, is a sufficient consideration for a contract of
partnership. See supra, § 50.

s See infra, §§ 63-65.

oDunnell v. Henderson, 23 N. J. Eq. 174; Sexton v. Lamb, 27 Kan.
624; Nichol v. Stewart, 36 Ark. 612.

lit; CAPITAL OF FIRM.

After the capital and contributions of the different partners
have been fixed by agreement, they cannot be changed without
the consent of all the partners. A partner cannot voluntarily
increase his capital, nor can he be compelled to furnish more
capita] than he has agreed to bring in and risk. But he must
bring in the amount he has agreed to do, and must leave it in
the business until the firm is dissolved.10

Return of Contributions on Dissolution.

Upon the dissolution of the partnership, and the winding
up of its affairs, the capital must be returned to the partners
who contributed it, before there can be any distribution of
profit.11 Each partner's contribution is regarded as a firm
debt to such partner, which must be repaid before there are
any profits to be divided.12 The capital is distributed in the
same proportions in which it was furnished. A partner who
furnished no capital, but merely contributed his time and
services, is not entitled to any part of the capital.13 He must
look to his share of the profits for compensation. Where the

ioLindl. Partn. p. 321; Fulmer's Appeal, 90 Pa. 143; Crawshay v.
Collins, 15 Ves. 218; Cocke v. Evans' Heirs, 9 Yerg. (Tenn.) 287.

ii Whitcomb v. Converse, 119 Mass. 38, Burdick's Cases, 575,
Mechem's Cases, 492; Shea v. Donahue, 15 Lea (Tenn.) 160; Taylor
v. Coffing, 18 111. 422; Marquand v. New York Mfg. Co., 17 Johns.
(N. Y.) 525.

12 Whitcomb v. Converse, 119 Mass. 38, Burdick's Cases, 575,
Mechem's Cases, 492. Of course the debt of the firm to a partner
for capital is subordinate to the claims of third persons. See infra,
§ 127.

"Washington v. Washington (Tex. Civ. App.), 31 S. W. 88; Shea
v. Donahue, 15 Lea (Tenn.) 160; Conroy v. Campbell, 13 Jones & S.
(N. Y.) 326; Hasbrouck v. Childs, 3 Bosw. (N. Y.) 105. A simple
method of making distribution in accordance with the rule stated
in the text is to ascertain the amount contributed by each partner;
and the amount contributed by one partner in excess of another
should first be given him out of the assets, and then the balance is
to be divided among all the partners in proportion to their several
interests. The excess of one partner's advances over those of an-
other constitute a preferred claim upon the partnership assets.

RIGHTS OF PARTNERS. 117

firm assets are not sufficient to return the capital in full to
those who contributed, the deficiency must be borne by all
the partners in the proportion in which they would be liable
for any other loss, and, in the absence of anything to show a
contrary agreement, it will be presumed that the loss is to be
shared equally, even though the capital may have been con-
tributed unequally.14 The loss does not fall solely upon the
partners contributing the capital. A partner who contrib-
uted only his services is liable for his share of a loss of capital,
though he also has lost his labor.15

Presumption of Equality.

Where there is nothing to show what proportion of the capi-
tal was contributed by each partner, it will be presumed,
prima facie, that all contributed equally, and a distribution
and settlement will be made on that basis.16

Chamberlain v. Sawyers, 17 Ky. L. R. 716, 32 S. W. 475; Matthews
v. Adams (Md.), 33 Atl. 645; Nims v. Nims, 23 Fla. 69, 1 So. 527;
Fish v. Thompson, 68 Vt. 273, 35 Atl. 174, Burdick's Cases, 3.

i* Whitcomb v. Converse, 119 Mass. 38, Burdick's Cases, 575,
Mechem's Cases, 492; Jones v. Butler, 87 N. Y. 613; Taft v.
Schwamb, 80 111. 289, Burdick's Cases, 577; Richards v. Grinnell,
63 Iowa, 44, 18 N. W. 668; Raymond v. Putnam, 44 N. H. 160; Pea-
cock v. Peacock, 16 Ves. 49; Copland v. Toulmin, 7 Clark & F. 349;
Robinson v. Anderson, 7 De Gex, M. & G. 239; Taylor v. Coffing, 18
111. 422. As to the amount of a partner's share of profits and losses,
see infra, § 75.

In Hasbrouck v. Childs, 3 Bosw. (N. Y.) 105, each partner con-
tributed the same amount of capital, but it was agreed that H.,
who was to devote his whole time to the business, should receive
three-ioiirths of the profits. The firm met with a loss. It was held
that the loss should be equally borne by all the partners, and that
each was entitled to an equal share of the remaining assets.

'•"Whitcomb v. Converse, 119 Mass. 38, Burdick's Cases, 575,
Mechem's Cases, 492; Woelfel v. Thompson, 173 Mass. 301, 53 N. E.
819.

io Jackson v. Crapp, 32 Ind. 429; Peacock v. Peacock, 16 Ves. 49;
Copland v. Toulmin, 7 Clark & F. 349; Robinson v. Anderson, 7 De
Gex, M. & G. 239.

CHAPTER VII.

PARTNERSHIP PROPERTY.

66-68. What Constitutes.

69-71. How Title is Held.

72-73. Nature of Partner's Interest.

74. Sale or Partition.

75-76. Proportionate Share of Each Partner.

77-78. Attachment or Execution for Individual Debt of Partner.

79-80. Conversion of Firm Realty into Personalty.

81. Changing Joint into Separate Property, and Vice Versa.

What Constitutes.

66. Partnership property includes everything of value
which belongs to the partners as a firm, as distinguished
from that which belongs to the partners as individuals.

67. Whether or not any particular property is partnership
property depends upon the intention of the partners, as
evidenced by their express or implied agreement.

68. Prima facie^ all property and valuable interests orig-
inally brought into the capital stock, and the product
thereof, constitutes partnership properly, except —

Exception. — Where co-owners of land are partners
merely as to the profits of the land, other land pur-
chased out of such profits belongs to them as co-
owners, and not as partners.

The expression "partnership property" denotes everything
to which all the partners are entitled as partners.1 Whether
or not any particular property, real or personal, is or is not

1 Persons may be entitled to property jointly or in common, and
may also be partners, and yet that property may not be partner-
ship property. Morris v. Barrett, 3 Younge & J. 384.

WHAT CONSTITUTES. 119

partnership property, depends upon the agreement between
the partners,2 and, in the absence of any express agreement,
upon the agreement which may be implied from the circum-
stances under which it was acquired and subsequently used.3

2 Robinson Bank v. Miller, 153 111. 244, 38 N. E. 1078, Burdick's
Cases, 165, Mechem's Cases, 155; Lindsay v. Race, 103 Mich. 28, 61
N. W. 271; Fairchild v. Fairchild, 64 N. Y. 477; Lefevre's Appeal,
69 Pa. 125; Brooke v. Washington, 8 Grat. (Va.) 248, 56 Am. Dec.
146.

3 Whether or not land is partnership property depends upon the
intention of the partners. Wilson v. Black, 164 Pa. 555, 30 Atl. 488;
Robinson Bank v. Miller, 153 111. 244, 38 N. E. 1078, Burdick's Cases,
165, Mechem's Cases, 155, wherein the court said: "That intention
may be expressed in the deed conveying the land, or in the articles
of partnership, but when it is not so expressed, the circumstances,
usually relied upon to determine the question, are the ownership
of the funds paid for the land, the uses to which it is put, and the
manner in which it is entered in the accounts upon the books of
the firm. Where real estate is bought with partnership funds for
partnership purposes, and is applied to partnership uses, or entered
and carried in the accounts of the firm as a partnership asset, it is
deemed to be firm property; and, in such case, it makes no differ-
ence, in a court of equity, whether the title is vested in all the part-
ners as tenants in common, or in one of them, or in a stranger."
See, also, Lindsay v. Race, 103 Mich. 28, 61 N. W. 271; Page v.
Thomas, 43 Ohio St. 38, 1 N. E. 79; Collner v. Greig, 137 Pa. 606, 20
Atl. 938.

"When the land is conveyed to several partners, it is not indis-
pensable that it should be actually used for partnership purposes,
nor that a positive agreement should be proved, making it partner-
ship property. If it has been paid for with partnership effects, it
is then a question of intention, whether the conveyance is to have
its legal effect, and the parties are to be treated as tenants in com-
mon, or whether the land is to be treated as partnership property.
The manner in which the accounts are kept, whether the purchase
money was severally charged to the members of the firm, or whether
the accounts treat it the same as other firm property, as to pur-
chase money, income, expenses, etc., are controlling circumstances
in determining such intention, and from these circumstances an
agreement may be inferred." Fairchild v. Fairchild, 64 N. Y. 477.
The same evidence which will establish its character as partner-
ship property for the purpose of paying the debts and adjusting the

12Q PARTNERSHIP PROPERTY.

All property originally brought into the partnership stock, or
subsequently acquired, whether by purchase or otherwise, on
account of the firm, or for the purposes and in the course of
the partnership business, is partnership property.4 The capi-
tal is necessarily partnership property, for by its very nature
ii is property agreed to be contributed by the partner to the
firm for partnership purposes.5 Property bought with money

equities will determine it for the purpose of final division. Fair-
child v. Fairchild, 64 N. Y. 471.

-i Smith v. Small, 54 Barh. (N. Y.) 223; Wheatley's Heirs v. Cal-
houn, 12 Leigh (Va.) 264, 37 Am. Dec. 654. "Land is not ordinarily
a subject of partnership operation, and therefore stronger evidence
is required to show an intent to convert real estate into partner-
ship stock. But it is capable of being so converted; and an inten-
tion to make such conversion being shown by sufficient evidence, it
becomes as completely a part of the social effects as if it were per-
sonal estate. In the case of Wheatley's Heirs v. Calhoun, 12 Leigh
(Va.) 264, 37 Am. Dec. 654, this court said that 'whatever doubts
may have heretofore existed as to the light in which real property
is to be considered, when bought and used by a commercial part-
nership for the purposes of the concern, it is now well settled that
it is to be looked upon as forming a part of the partnership funds.
Such is at present the received doctrine in England, and so this
court has decided.' In that case, Wheatley and Calhoun had pur-
chased a mill and tract of land jointly, and for some time conducted
a partnership milling business. The question was whether there
was sufficient evidence of an intention to convert the mill into part-
nership stock, or whether they merely intended to carry on the mill-
ing business in partnership. Tucker, P., in delivering the opinion
of the court, said: "There may, indeed, be partnerships in the busi-
ness of milling, or mining, or farming; but unless the intent of the
joint owners to throw their real estate into the fund as partership
stock is distinctly manifested, or unless the real property is bought
out of the social funds, for partnership purposes, it must still re-
tain its character of realty.' 'In this case, I see nothing from
whence to infer that there was any design on the part of these joint
purchasers to convert their real estate into partnership stock.' "
Brooke v. Washington, 8 Grat. (Va.) 248, 56 Am. Dec. 146.

Seat on stock exchange, In re Snift, 118 Fed. 348.

o See supra, c. 6, "Capital."

WHAT CONSTITUTES. 121

belonging to the firm is prima facie partnership property,6
even though the title is taken in the individual name of one
or more partners.7 Property may, however, be purchased
with partnership funds, to be held by the partners as individ-
uals, if such is their intention.8 Such a transaction would
amount merely to a withdrawal by mutual agreement of so
much capital or profits from the firm business. The good

e Scott v. McKinney, 98 Mass. 344; Cundey v. Hall, 208 Pa. 335;
Foster v. Sargent, 72 N. H. 170, 55 Atl. 423; Dawson v. Parsons, 10
Misc. Rep. (N. Y.) 428; Thursby v. Lidgerwood, 69 N. Y. 198; Smith
v. Smith, 5 Ves. Jr. 193; Ex parte Hinds, 3 De Gex & S., 613. Land
bought or improved by partnership funds is treated as partnership
property between the parties. Meason v. Kaine, 63 Pa. 335. Real
estate purchased with partnership funds for the use of the firm,
althought the legal title is in the member or members of the firm
in whose name the conveyance is taken, is in equity considered as
the property of the firm, for the payment of its debts, and for the
purpose of adjusting the equitable claims of the copartners as be-
tween themselves. Smith v. Tarlton, 2 Barb. Ch. (N. Y.) 336.

7 Traphagen v. Burt, 67 N. Y. 30; Williams v. Gillies, 75 N. Y.
197, Burdick's Cases, 290; Davis v. Davis, 60 Miss. 615, Burdick's
Cases, 164; Kruschke v. Stefan, 83 Wis. 373, 53 N. W. 679, Burdick's
Cases, 167; Smith v. Smith, 5 Ves. 193. A trust results in favor of
the other partner to the extent of his interest in the funds. Crone
v. Crone, 180 111. 599, 54 N. E. 605.

s Dyer v. Clark, 5 Mete. (Mass.) 562, Ames' Cas. 251, wherein the
court said that this would be the case "where there is such an ex-
press agreement at the time of the purchase, or a provision in the
articles of copartnership, or where the price of such purchase
should be charged to the partners respectively in their several ac-
counts with the firm. This would operate as a division and dis-
tribution of so much of the funds, and each would take his share
divested of any implied trust." If, with the acquiescence of the
members of a firm, partnership funds are applied to the purchase
of real estate in the name of one member, there is no resulting
trust. Lefevre's Appeal, 69 Pa. 122.

"Land purchased by a partner with money drawn from the firm
and charged to his individual account cannot be regarded as part-
nership property, never having been appropriated to partnership
purposes." Louisville Trust Co. v. Columbia Finance & Trust Co.,
22 Ky. Law Rep. 1385, 59 S. W. 867, 60 S. W. 1.

122 PARTNERSHIP PROPERTY.

will of the partnership business, in so far as it lias a salable
value, is prima facie partnership property.9

Property may be used for partnership purposes, and yet,
by agreement, remain the individual property of one of the
partners,10 as is m>i infrequently the case with respect to
office furniture, trade utensils, and the like;" for, as has
been Been, the mere use of property, and not the property it-
self, may be contributed as capital.12 But if the property
itself is broughl into the capital stock as part of such partner's
contribution to the joint capital, it becomes partnership prop-
erty, and any increase in its value will belong' to the firm, and
any decrease must be borne by the firm.13

The ninst difficuTl cases are those in which co-owners are
partners in profits derived from the common properly. If
the property is acquired for the purpose of being worked in
partnership, or is merely accessory to and involved in the
partnership trade, it will he deemed partnership property;
otherwise, not.14 Where several persons are co-owners of

•■' Wedderburn v. Wedderburn, 22 Beav. 104; Slater v. Slater, 175
N. Y. 143, 67 N. E. 224, 96 Am. St. Rep. 605, 61 L. R. A. 796.

lopearce v. Pearce, 77 111. 284; Flagg v. Stowe, 85 111. 164; Cham-
pion v. Bostwick, 18 Wend. (N. Y.) 175; Van Voorhis v. Webster,
85 Hun, 591, 33 N. Y. Supp. 121; Richmond v. Voorhees, 10 Wash.
316, 38 Pac. 1014; Burdon v. Barkus, 4 De Gex, F. & J. 42; Hart v.
Hart, 117 Wis. 639, 94 N. W. 890.

■ Ex parte Owen, 4 De Gex & S. 351; Ex parte Smith, 3 Mad-
docks, 63.

12 See supra, c. 6, "Capital." Where it was agreed that a commis-
sion company should provide the free use of an elevator to defend-
ant, and pay the taxes thereon, and that defendant should furnish
a certain amount of capital, and should buy grain and ship it to the
commission company, and that the profits should be divided, it was
held that the company contributed merely the use of the elevator,
and not the elevator itself, to the enterprise. Murphy v. Warren, 55
Neb. 215, 75 N. W. 573.

ia Robinson v. Ashton, L. R. 20 Eq. 25.

« Robinson Bank v. Miller, 153 111. 244, 38 N. E. 1078, Burdick's
Cases, 165, Mechem's Cases, 155; Crawshay v. Maule, 1 Swanst. 495;

HOW TITLE IS HELD. 123

land, and are partners merely as to the profits made by the
use of the land, and not as to the land itself, other land pur-
chased by them out of the profits, to be used in like manner,
will, in the absence of an agreement to the contrary, belong
to them as co-owners, and not as partners.15 The acquired
land may, however, be partnership property, though the orig-
inal property is not, if such is the intention of the parties16

How Title is Held.

69. Partnership personalty may be_ acquired, held, and
transferred, either in the firm name, or in_the_individual
name of one or more ofjthe partners.

70. The legal title to_ partnership realty cannot bejield in_^

the firm name, but must be held in the individual name
of one or more of the partners, cr by a trustee.

71. It is immaterial imwhose name the title to either realty.
or personalty is taken, as the property will be deemed
partnership property, and the holder a_ trustee for the
firm.

PersonaJI ij.

A firm, as such, may acquire, hold, and transfer personal
property and contract in reference thereto in its firm name.17
So, also, personalty may be acquired by one or more partners

Fereday v. Wightwick, Tamlyn, 250; Waterer v. Waterer, L. R. 15
Eq. 402; Jackson v. Jackson, 9 Ves. Jr. 591; Davies v. Games, 12
Ch. Div. 813; Brown v. Oakshot, 24 Eeav. 254; Davis v. Davis (1894),
1 Ch. 393, Burdick's Cases, 12. A theater building and its appur-
tenances owned by partners are partnership property, where the
partnership business consists in the uses to be made thereof. Priest
v. Chouteau, 12 Mo. App. 252, affirmed 85 Mo. 398.

« Steward v. Blakeway, L. R. 4 Ch. App. 603, L. R. 6 Eq. 479.

10 Morris v. Barrett, 3 Younge & J. 384.

i" See ante, c. 5, "Firm Name."

1-24: PARTNERSHIP PROPERTY.

in their own name, bu1 whicb will nevertheless belong to the
firm, as where such was the understanding of all the partners,
or where is was purchased out of partnership funds.18 Eow-
ever the title may lie acquired, the whole legal ami beneficial
ownership of partnership chattels is in the firm as such, ami
not in the partners as individuals.19

Realhj.

The principle of law i- well settled that it is impossible for
a partnership, as such, to hold the legal title to real estate.20
Only a person can hold the legal title to real estate, ami, as
has been seen, a partnership is not a legal person.21 Where
a deed is made to a partenrship in its firm name, and such
firm name contains the individual names of one or more of
the partners, the legal title will vest in such of the partners
as are named in the firm name, and therefore in the deed, and
in them only.22 But the legal title so vested in one or more

is Wolf v. Selling (Super. Ct. N. Y.), 25 N. Y. Supp. 963.

loHendren v. Wing, 60 Ark. 561, 31 S. W. 149, Burdick's Cases,
161.

sopercifull v. Piatt, 36 Ark. 456; Rammelsberg v. Mitchell, 29
Ohio St. 22; Kelley v. Bourne, 15 Or. 476, 16 Pac. 40; Holmes v.
Jarrett, 7 Heisk. (Tenn.) 506, Ames* Cas. 150. Though a partner-
ship, as such, possesses no capacity to take a conveyance of the
legal title to real estate, it may acquire in its firm name a lien on
real estate to secure an indebtedness. Barber v. Crowell, 55 Neb.
571, 75 N. W. 1109.

-' Tidd v. Rines, 26 Minn. 201, 2 N. W. 497; Gille v. Hunt, 35
Minn. 357, 29 N. Wr. 2; Holmes v. Jarrett, 7 Heisk. (Tenn.) 506,
Ames' Cas. 150.

22 Gossett v. Kent, 19 Ark. 602; Winter v. Stock, 29 Cal. 407;
Woodward v. McAdam, 101 Cal. 438, 35 Pac. 1016, Burdick's Cases,
163; Menage v. Burke, 43 Minn. 211, 45 N. W. 155; Moreau v. Saf-
farans, 3 Sneed (Tenn.) 595; Holmes v. Jarrett, 7 Heisk. (Tenn.)
506, Ames' Cas. 150; Riddle v. Whitehill, 135 U. S. 621. The mere
fact that the given or Christian names of the partners do not ap-
pear does not render the deed void for uncertainty as to the grant-
ees, but parol evidence is admissible to show who were intended to

HOW TITLE IS HELD. 125

individual members of the firm is held by them as trustees
for the partnership.23 In the view of equity, it is immaterial
in whose name the legal title of the property stands, — whether
in the individual name of a copartner, or in the joint names
of all. The possessor of the legal title holds the property in
trust for the purposes of the partnership,24 and the property
is deemed partnership property, and is subject to all the in-
cidents thereof.25

be grantees. Holmes v. Jarrett, 7 Heisk. (Tenn.) 506, Ames' Cas.
150; Ward v. Espy, 6 Humph. (Term.) 447. Where the firm name
does not contain the name of any individual partner, the title re-
mains in the grantor, but in trust for the firm. Tidd v. Rines, 26
Minn. 201, 2 N. W. 497.

It has been held in a few jurisdictions that a conveyance to a
firm, in which the grantee is designated by its firm name, conveys
the legal title to the property to those who use that "style and
firm." Brunson v. Morgan, 76 Ala. 593; Hoffman v. Porter, 2 Brock.
158, Fed. Cas. No. 6,577; Jones v. Neale, 2 Pat. & H. (Va.) 339;
Maugham v. Sharpe, 17 C. B. (N. S.) 443, Burdick's Cases, 160.
Mr. Burdick (Partn. p. 81) approves of this view, upon the ground
that it is unnecessary to designate the grantee by name if he is
otherwise sufficiently described, and a firm name is a sufficient de-
scription because "id certum est quod certum reddi potest."

23 Holmes v. Jarrett, 7 Heisk. (Tenn.) 506, Ames' Cas. 150; Moreau
v. Saffarans, 3 Sneed (Tenn.) 599. Such a resulting trust may be
established by parol. Kringle v. Rhomberg, 120 Iowa, 472, 94 N. W.
1115.

24 Gray v. Palmer, 9 Cal. 616; Dupuy v. Leavenworth, 17 Cal. 262;
Faulds v. Yates, 57 111. 416; Railsback v. Lovejoy, 116 111. 442, 6 N. E.
504; Bopp v. Fox, 63 111. 540; Pepper v. Pepper, 24 111. App. 316;
Allison v. Perry, 130 111. 9, 22 N. E. 492; Paige v. Paige, 71 Iowa,
318, 32 N. W. 360, Mechem's Cases, 170; Harris v. Harris, 153 Mass.
439, 26 N. E. 1117; Dyer v. Clark, 5 Mete. (Mass.) 562, Ames' Cas.
251; Delmonico v. Guillaume, 2 Sandf. Ch. (N. Y.) 366, Burdick's
Cases, 161; Williams v. Gillies, 75 N. Y. 197, Burdick's Cases, 290;
Riddle v. Whitehill, 135 U. S. 621; Shanks v. Klein, 104 U. S. 18,
Mechem's Cases, 164, Paige's Cas. 136.

25 Jones v. Davies, 60 Kan. 309; Spalding v. Wilson, 80 Ky. 589.
Dyer v. Clark, 5 Mete. (Mass.) 562; Messer v. Messer, 59 N. H. 375;
Ross v. Henderson, 77 N. C. 170; Riddle v. Whitehill, 135 U. S. 621;
Crawshay v. Maule, 1 Swanst. 530, 19 Eng. Rul. Cas. 484. Land

120 PARTNERSHIP PROPERTY.

A bona fide purchaser for value, and without notice from
the partner who holds the Legal title, takes the title discharged
of any trust in favor of the firm or its creditors.28 But if
sueli purchaser had notice that the property was in fact part-
nership property, or if, being without notice, he did not part
with value upon the faith of the apparent title in his gran-
tor, he takes the title subject to the trust or charge in favor
of tin1 firm and its creditors.27

may belong to a partnership, although held in the name of one
partner. Williams v. Shelden, 61 Mich. 311, 28 N. W. 115. It is im-
material in whom the legal estate is vested, — whether in one of the
partners or in all. It is equally partnership property, and a court
of equity will deal with it as such. Darby v. Darby, 3 Drewry, 495,
Ames' Cas. 177. Where land is purchased with joint funds, and for
partnership purposes, it becomes firm property, though the title be
held by one of the partners in his own name; and judgments
against the firm are payable out of the proceeds thereof, in prefer-
ence to individual judgments. Erwin's Appeal, 39 Pa. 535; West
Hickory Min. Ass'n v. Reed, 80 Pa. 38. And see Black v. Seipt, 34
Leg. Int. (Pa.) 66. Real estate put into the partnership by one of
the parties at an agreed valuation becomes partnership property
without a conveyance from the owner, and such owner holds the
legal title in trust for the partnership as assets of the partnership
estate. Wiegand v. Copeland. 14 Fed. 118.

28 McNeil v. First Congregational Soc, 66 Cal. 105, 4 Pac. 1096;
Robinson Bank v. Miller, 153 111. 244, 38 N. E. 1078, Burdick's Cases,
165, Mechem's Cases, 155; McMillan v. Hadley, 78 Ind. 590; Hiscock
v. Phelps, 49 N. Y. 97.

-" Goldthwait v. Janney, 102 Ala. 431, 15 So. 560, Burdick's Cases,
176; Dyer v. Clark, 5 Mete. (Mass.) 562, Ames' Cas. 251; Mattlack
v. James, 13 N. J. Eq. 126; Page v. Thomas, 43 Ohio St. 38, 1 N. E.
79. It is a legal presumption that a firm's possession of realty is
subordinate to, and consistent with, the record title in an individual
member. Hardin v. Dolge, 46 App. Div. 416, 61 N. Y. Supp. 753.
There may be a dormant partnership in the purchase and sale of
real estate as between the partners themselves, but, as between the
partners and third persons, the law in regard to dormant partners
will not apply. Gray v. Palmer, 9 Cal. 616.

Where there is a conveyance of firm land, by consent, to one of
the partners, and the deed is recorded, but is accompanied by no
agreement disclosing the interest of the other, and money is bor-

NATURE OF PARTNER'S INTEREST. 127

The best method of conveying real estate to a firm is to
name all the partners in the deed as grantees, describing
them as doing business as partners under a designated firm
name, and expressly declaring that the grantees are to hold
the title as such partners, and for partnership purposes.
Where this is clone, no question can arise as to whether the
property is partnership or individual property, and no subse-
quent purchaser can claim to have purchased without knowl-
edge of its partnership character.28

Nature of Partner's Interest.

72. The interest of partners in partnership property is
neither that of tenants in common nor joint tenants, but,
is sui generis. J 'ijhi /hai^l. klsrJS'.

73. The share of a partner at any given time is the propor-
tion of the then existing assets to which he would be
entitled after the discharge of all the then existing
debts.

The interest of partners in the partnership property is a
peculiar one. The recognized incidents attaching to such
property differ in so many respects from those attaching to
other forms of collective holding recognized in the law that it
is misleading to attempt to assimilate a holding in partner-
ship to any of them. An estate in partnership has many of

rowed by the grantee in the deed on his personal judgment bill,
which is entered of record against the land as he then held it, no
averment of any right by parol, or by secret agreement in writing,
can stamp the land as firm property, and thus destroy the lien of
the judgment creditor. Gunnison v. Erie Dime Sav. & Loan Co., 157
Pa. 303, 27 Atl. 747, 33 W. N. C. (Pa.) 303. See, also, J. Pars. Partn.
8 111, and compare Page v. Thomas, 43 Ohio St. 38, 1 N. E. 79.

28Mechem, Partn. § 104; Lauffer v. Cavett, 87 Pa. 479; Davis v.
Davis, 60 Miss. 615, Burdick's Cases, 164.

128 PARTNERSHIP PROPERTY.

the characteristics of estate's in common and in joint tenancy,
but partners arc neither tenants in common nor joint ten-
ants."' If partners were tenants in common, a sale or trans-
fer of one partner's interest in the firm property would vest
in the transferee an undivided interest in such property; but
it is well settled that a partner cannot so transfer an undi-
vided interest in any specific article belonging to the firm;30
and a transfer of his interest, either by voluntary act or by
legal process, merely entitles the transferee to receive such
partner's share of what may remain after a settlement of the
partnership affairs, and the payment of all the partnership
debts.31 On the other hand, a partner may sell specific part-
nership property so as to pass the entire title to the vendee;.
whereas, if a tenant in common should attempt to sell the en-
tire common property, only his own undivided interest would
pass.32 So, also, upon the death of a partner, the firm assets

-•o Hubbardston Lumber Co. v. Covert, 35 Mich. 254; Hutchinson
v. Dubois, 45 Mich. 143, 7 N. W. 714; Kramer v. Arthurs, 7 Pa. 165;
Preston v. Fitch, 137 N. Y. 41, 33 N. E. 77; Kruschke v. Stefan, 83
Wis. 373, 53 N. W. 679, Burdick's Cases, 167.

soNichol v. Stewart, 36 Ark, 612; Pratt v. McGuinness, 173 Mass.
170, 53 N. E. 380.

si Sanborn v. Royce, 132 Mass. 594; Collins' Appeal, 107 Pa. 590;
Durborrow's Appeal, 84 Pa. 404; Kenneweg v. Schilansky, 45 W. Va.
521, 31 S. E. 949; Bank v. Carrollton R. Co., 11 Wall. (U. S.) 624,
Mechem's Cases, 147; Ex parte Ruffin, 6 Ves. 119, Burdick's Cases,
192, 19 Eng. Rul. Cas. 628; West v. Skip, 1 Ves. Ser. 240, 19 Eng.
Rul. Cas. 621. An assignee, therefore, or separate creditor, of one-
partner, is entitled only to the share of each partner, after a set-
tlement of the accounts, and after all the just claims of the other
partner are satisfied. Nicoll v. Mumford, 4 Johns. Ch. (N. Y.) 522.
The transferee does not become a tenant in common with the other
partners. Bank v. Carrollton R. Co., 11 Wall. (U. S.) 624, Mechem's
Cases, 147; Donaldson v. State Bank, 1 Dev. Eq. (N. C.) 103.

32 Shearer v. Shearer, 98 Mass. 107, Ames' Cas. 185; Person v.
Wilson, 25 Minn. 189; Mersereau v. Norton, 15 Johns. (N. Y.) 180;
Thursby v. Lidgerwood, 69 N. Y. 198; Thompson v. Bowman, 6 WalL
(U. S.) 316.

NATURE OF PARTNER'S INTEREST. 129

vest in the survivors, to the exclusion of the deceased part-
ner's representatives ;33 and in this respect, an estate in part-
nershij) approximates a joint tenancy, rather than a tenancy'
in common, but that it is not a joint tenancy is apparent from-
the fact that this right of survivorship is not a beneficial
right. The survivor takes the assets charged with a trust,
or quasi trust,34 to pay the firm debts, and wind up its

33 Smith v. Wood, 31 Md. 293; Dyer v. Clark, 5 Mete. (Mass.)
562, Ames' Cas. 251; Holbrook v. Lackey, 13 Mete. (Mass.) 132,
Ames' Cas. 160; Bush v. Clark, 127 Mass. Ill; Bassett v. Miller, 39
Mich. 133, Ames' Cas. 162; Merritt v. Dickey, 38 Mich. 41; Barry
v. Briggs, 22 Mich. 201; Shanks v. Klein, 104 U. S. 18, Mechem's
Cases, 164; Clay v. Freeman, 118 U. S. 97; Newell v. Townsend, 6
Sim. 419, Ames' Cas. 154; Martin v. Crump, 2 Salk. 444, 1 Ld. Raym.
340, Ames' Cas. 153; Rees v. Duncan, 21 Australian Law Times, 205
(Victoria). But see Buckley v. Barber, Exch. 164, Ames' Cas. 154.
See, also, infra, c. 11, "Dissolution." An execution cannot be levied
upon partnership goods for the individual debt of a partner, after
the death of such partner, because the property in the goods there-
upon vests in the survivor. Newell v. Townsend, 6 Sim. 419, Ames'
Cas. 154. The whole property in the partnership estate accrues to
the surviving partner, and he is the owner thereof, both at com-
mon law and in equity. Knox v. Gye, L. R. 5 H. L. Cas. 656, Ames'
Cas. 163. The time of dissolution fixes the time at which the ac-
count is to be taken in order to ascertain the amount of a partner's
share. However long it may be before a final settlement may be
had, when made, it must relate back to the time of dissolution to
determine the relative interests of the partners in the fund. Dyer
v. Clark, 5 Mete. (Mass.) 562, Ames' Cas. 251. The surviving part-
ner must sue alone upon choses in action belonging to the firm,
and the personal representatives of the deceased partner cannot be
joined. Bassett v. Miller, 39 Mich. 133, Ames' Cas. 162; Willson v.
Nicholson,- 61 Ind. 241; Daby v. Ericsson, 45 N. Y. 786; Stafford
v. Gold, 9 Pick. (Mass.) 533. See, also, infra, chap. 10, 'Actions."
The surviving partner is the real party in interest to a demand
owned by or due to the firm. Daby v. Ericsson, 45 N. Y. 786.

34 Hill v. Draper, 54 Ark. 395, 15 S. W. 1025; Jones v. Dexter, 130
Mass. 380; Russell v. McCall, 141 N. Y. 437, 39 N. E. 498, Burdick's
Cases, 256; Knox v. Gye, L. R. 5 H. L. Cas. 656. "The surviving
partner is often called a 'trustee,' but the term is used inaccurately.
He is rot a trustee, either expressly or by implication. On the

9

130 PARTNERSHIP PROPERTY.

affairs, and he must account to the representatives of his de-
cease* 1 partner for all the firm assets.35

death of a partner, the law confers on his representatives certain
rights as against the surviving partner, and imposes upon the latter
correspondent obligations. The surviving partner may be called, so
far as these obligations extend, a trustee for the deceased partner;
but when these obligations have been fulfilled, or are discharged,
or terminate by law, the supposed trust is at an end. * * * The
surviving partner may be called a trustee for the dead man, but
the trust is limited to the discharge of the obligation, which is lia-
ble to be barred by lapse of time, — as between an express trustee
and the cestui que trust time will not run; but the surviving part-
ner is not a trustee, in that full and proper sense of the word. It
is most necessary to mark this again and again, for there is not a
more fruitful source of error in law than the inaccurate use of lan-
guage. * * * The mistaken phrase that a surviving partner is
a trustee, and that therefore no time can run as between him and
the representative of the deceased partner, has led to what I humbly
conceive to be the error in the judgmnt originally given." Knox v.
Gye, L. R. 5 H. L. Cas. 656, Ames' Cas. 163.

In Taylor v. Taylor, 28 Law Times (N. S.) 189, Ames' Cas. 172,
note, James, L. J., said: "The law is that the right of a surviving
partner to the partnership assets is absolute. The right of the legal
personal representatives of the deceased partner is to an account
merely of the partnership assets; and to the taking of that, as to
the taking of any other account, the statute of limitations applies.
The case of Knox v. Gye was strongly approved.

35 Dyer v. Clark, 5 Mete. (Mass.) 562, Ames' Cas. 251; Holbrook
v. Lackey, 13 Mete. (Mass.) 132, Ames' Cas. 160; Strauss v. Fred-
erick, 91 N. C. 121; Rees v. Duncan, 21 Australian Law Times, 205
(Victoria); West v. Skip, 1 Ves. Sr. p. 242, 19 Eng. Rul. Cas. 622;
Jeffereys v. Small, 1 Vern. 217. Ames' Cas. 152; Lake v. Gibson, 1
Eq. Cas. Abr. 290, pi. 3; Martin v. Crump, 2 Salk. 444, 1 Ld. Raym.
340, Ames' Cas. 153. It is not necessary to provide against sur-
vivorship in the partnership articles. Jeffereys v. Small, 1 Vern.
217, Ames' Cas. 152. The right of the deceased partner's represen-
tative consists in having an account of the property, of its collec-
tion and application, and in receiving that portion of the clear bal-
ance which accrues to the deceased's share and interest in the part-
nership. Knox v. Gye, L. R. 5 H. L. Cas. 656, Ames' Cas. 163. The
good-will in a partnership business does not, on the death of one
partner, survive beneficially to the others. When it has any value,

NATURE OF PARTNER'S INTEREST. 131

The real and actual interest of each partner in the part-
nership stock is the net balance which will be coming to him
after payment of all the partnership debts, and a just settle-
ment of the account between himself and his partners.36

As has been seen, the legal title to real estate cannot be
held by the firm, as such.36a Where the legal title to realty
is vested in more than one partner, is is held by them as ten-
ants in common,37 but in equity it is chargeable with the
partnership debts, and with any balance which may be due
from one partner to another upon winding up the affairs of

a due proportion belongs to the estate of the deceased partner, but
the surviving partner has still the right to carry on the same busi-
ness, and at the same place. Smith v. Everett, 27 Beav. 446, 29 L. J.
Ch. 236, 19 Eng. Rul. Cas. 649.

seNoonan v. Nunan, 76 Cal. 44, 18 Pac. 98; Filley v. Phelps, 18
Conn. 294; Carter v. Bradley, 58 111. 101; Bopp v. Fox, 63 111. 540;
Sindelare v. Walker, 137 111. 43, 27 N. E. 59, Burdick's Cases, 304,
Mechem's Cases, 154; Tobey v. McFarlin, 115 Mass. 98; Dyer v.
Clark, 5 Mete. (Mass.) 562, Ames' Cas. 251; Hutchinson v. Dubois,
45 Mich. 143, 7 N. W. 714; Staats v. Bristow, 73 N. Y. 264, Mechem's
Cases, 152, Paige, Cas. 106; Menagh v. Whitwell, 52 N. Y. 146, Bur-
dick's Cases, 222, Ames' Cas. 229; Nicoll v. Mumford, 4 Johns. Ch.
(N. Y.) 522; Ludlow's Heirs v. Cooper's Devisees, 4 Ohio St. 10;
Kenneweg v. Schilansky, 45 W. Va. 521, 31 S. E. 949; Bank v. Car-
rollton R. Co., 11 Wall. (U. S.) 624, Mechem's Cases, 147; Case v.
Eeauregard, 99 U. S. 119, Mechem's Cases, 440; West v. Skip, 1 Ves.
Sr. 241, 19 Eng. Rul. Cas. 621; Ex parte Ruffin, 6 Ves. 119, Burdick's
Cases, 192, 19 Eng. Rul. Cas. 628. A partner's interest is a chose in
action, i. e., a jus in personam, and his claim is accordingly barred
by the statute of limitations applicable to personal actions. Knox v.
Gye, L. R. 5 H. L. Cas. 656, Ames' Cas. 163.

sea See § 56, ante.

•"Pepper v. Pepper, 24 111. App. 316; Thayer v. Lane, Walk.
(Mich.) 200; Fountain v. Hutchinson, 108 Mich. 596, 66 N. W. 477;
Coles v. Coles, 15 Johns. (N. Y.) 159; Greene v. Graham, 5 Ohio,
264; Alabama Marble & Stone Co. v. Chattanooga Marble & Stone
Co. (Tenn. Ch.), 37 S. W. 1004. The legal title is in the partners as
tenants in common and the equitable title is in the firm. Hartnett
v. Stillwell, 121 Ga. 386, 49 S. E. 276.

132 PARTNERSHIP PROPERTY.

the firm.38 Upon the death of a partner in whom the legal
title to real estate is rested, the Legal title descends to hi*
heirs, and does nol pass to the surviving partners, as in the

.■:i-r of [icrsniiallv. Ilul the equitable title or beneficial in-
terest does pass to the survivors for the purpose of settling
up the partnership, and the heirs will hold the legal title in
trusl for thai purpose.30 It follows therefore, thai a part-
ner's real beneficial interest in firm realty stands upon the
same footing with his interest in the personalty. In either
case, ii is simply a right to share in what may remain after
winding up the partnership, and paying all its debts.40

ssBuchan v. Sumner, 2 Barb. Ch. (N. Y.) 165; Smith v. Tarlton,
2 Barb. Ch. (N. Y.) 336; Buckley v. Buckley, 11 Barb. (N. Y.) 43.
Compare Coster v. Clarke, 3 Edw. Ch. (N. Y.) 428.

■Tillinghast v. Champlin, 4 R. I. 173; Shanks v. Klein, 104 U. S.
18, Mechem's Cases, 164; Walling v. Burgess, 122 Ind. 299; Van
Aken v. Clark, 82 Iowa, 256, 48 N. W. 73; Delmonico v. Guillaume,
2 Sandf. Ch. (N. Y.) 366, Burdick's Cases, 161. The surviving part-
ner takes real estate only so far as in equity it has the character
of personalty, and this is so far, and so far only, as may be neces-
sary for the payment of the partnership debts. Strong v. Lord, 107
111. 25.

Real estate purchased and held by a partnership firm for the pur-
poses of the firm so far partakes of the character of personalty that
it is under the control of a court of equity in making a final adjust-
ment of the affairs of the partnership, whether in stating an ac-
count between the partners or in marshalling the assets for the
payment of debts. The realty being impressed with this character,
as assets of the firm, a court of equity has the power to vest in a
surviving partner the discretion to dispose of it at public or private
sale. Mauck v. Mauck, 54 111. 281.

«Bopp v. Fox, 63 111. 540; Simpson v. Leech, 86 111. 286; Trow-
bridge v. Cross, 117 111. 109, 7 N. E. 347; Henry v. Anderson, 77
Ind. 361; Du Bree v. Albert, 100 Pa. 483; Kruschke v. Stefan, 83
Wis. 373, 53 N. W. 679, Burdick's Cases, 167. A sale of partnership
real estate by order of the orphan's court, for the payment of a de-
ceased partner's debts, does not pass the interest of the firm, though
the legal title was in the decedent alone. McCormick's Appeal, 57
Pa. 54. See Jones' Appeal, 70 Pa. 169. Compare Rees v. Duncan,.
21 Australian Law Times, 205 (Victoria).

NATURE OF PARTNER'S INTEREST. 133

Same— Sale oe Partition.

74. A partner is entitled to insist "P"" a sale, but not a
partition, of partnership property.

Upon the dissolution of a partnership, all the property be-
longing to the partnership must be sold, and the proceed^,
after discharging all the partnership debts and liabilities,
must be divided among the partners according to their respec-
tive shares in the capital.41 jSTo one partner has a right to
insist that any particular part or item of the partnership
property shall remain unsold, and that he shall retain his
share of it in specie.42 In other words, a partner can compel
a sale, but not a partition of the partnership property.43

In regard to personal property, the rule that it is to be in
all cases converted into money for distribution is undoubtedly
well established and entirely uniform everywhere. In this,
equity follows the analogies of the law.44

In regard to real estate, there is some conflict of decision.
In some cases it is held that, so long as the debts of the part-
nership remain unliquidated, a partition will not be decreed,
and that the only method by which a partner, under such con-
ditions, can compel a division of the firm property, is by a
bill to administer and settle the partnership affairs.45 But

41 Darby v. Darby, 3 Drewry, 495, Ames' Cas. 177.

42 Darby v. Darby, 3 Drewry, 495, Ames' Cas. 177, citing Crawshay
v. Collins, 15 Ves. 218, and Featherstonhaugh v. Fenwick, 17 Ves.
298.

43 Lyman v. Lyman, 2 Paine, 11, Fed. Cas. No. 8,628; Sigourney
v. Munn, 7 Conn. 11; Pierce's Adm'r v. Trigg's Heirs, 10 Leigh (Va.)
406; Wild v. Milne, 26 Beav. 504, Burdick's Cases, 166, Ames' Cas.
173.

44 Shearer v. Shearer, 98 Mass. 107, Ames' Cas. 185.
45Molineaux v. Raynolds, 54 N. J. Eq. 559, 35 Atl. 536, Burdick's

Cases, 169. Lands purchased by a partnership for development and

134 PARTNERSHIP PROPERTY.

where there are no unpaid debts of the firm outstanding, it is
held thai a partner may have a partition in kind,46 and where
a sale would work injustice a partner may pay all outstand-
ing dolus and insisl on such a partition.46* In other cases it
is held, and this is ihe settled English view, that, upon the
dissolution "i- termination of a partnership, any one of the
partners is entitled to have the whole of the assets disposed
of by sale, irrespective of whether there are any debts to be
provided for or not, and thai a partner cannot claim a par
tition of the property under any circumstances.47

To prevent a sale of the • partnership effects, it is fre-
quently provided in the articles of copartnership that, upon
a dissolution of the partnership by the death, notice, mis-
sale are not subject to partition among the partners at the request
of one of the number, if such partition would hinder the venture,
until the object of the partnership has been attained, or proved im-
practicable. Craighead v. Pike (N. J. Ch.), 38 Atl. 296. Land pur-
chased with partnership funds, and title taken to partners. One
dies. Held, that the land was held as tenants in common, and the
part of the deceased descended to his heirs, and, being sold under
order of court, purchaser is entitled to partition. Greene v. Gra-
ham, 5 Ohio, 264. Cited in Ludlow's Heirs v. Cooper's Devisees, 4
Ohio St. 8.

"; Molineaux v. Raynolds, 54 N. J. Eq. 559, 35 Atl. 536, Burdick's
Cases, 169. Real property which constitutes the stock in trade of
a partnership that has no outstanding debts or liabilities may, upon
the application of part of the firm, be divided among the partners
according to their respective interests therein. Patterson v. Blake,
12 Ind. 436. Equity cannot be invoked to convert all real estate
into personalty for the mere purpose of a division in the interest
of one class of representatives of a deceased partner against an-
other class of representatives of the same partner. Shearer v.
Shearer, 98 Mass. 107, Ames' Cas. 185.

«a Kelley v. Shay, 206 Pa. 208, 55 Atl. 925.

'- Wild v. Milne, 26 Beav. 504, Ames' Cas. 173, Burdick's Cases,
166, citing Crawshay v. Maule, 1 Swanst. 518; Cook v. Collingridge,
Jac. 607, 27 Beav. 456, 19 Eng. Rul. Cas. 634; Featherstonhaugh v.
Fenwick, 17 Ves. 298, 19 Eng. Rul. Cas. 570. The executors of the
deceased partner have a right to insist on a sale of every portion

SHARE OF EACH PARTNER. 135

conduct, or bankruptcy of one partner, the others shall be
entitled to take his share at a valuation in a manner pre-
scribed.48

Proportionate Share of each Partner.

75. The relative shares to which each partner is entitled in
the partnership property is regulated by their agree-
ment.

76. In the absence of poof of a different agreement, the
shares of all the partners will be presumed to be equal..

The rules as to the distribution and return of capital upon
the dissolution of a firm have been already considered.49
Whatever remains after the return of the capital constitutes
profits, and is to be shared by the partners in accordance
with the agreement therefor in the articles of partnership.50

of the partnership property. Knox v. Gye, L. R. 5 H. L. Cas. 656,
Ames' Cas. 163, per Lord Chancellor. Compare Shearer v. Shearer,
98 Mass. 107, Ames' Cas. 185.

48 Wilson v. Greenwood, 1 Swanst. 471; Burfield v. Rouch, 31
Beav. 241; Homfray v. Fothergill, L. R. 1 Eq. 567. See, also, Cook
v. Collingridge, Jac. 607, 19 Eng. Rul. Cas. 634. "Where the articles
do not present;; the terms, the law ascertains what shall be the con-
sequence of dissolution, viz., that the whole of the joint property
must be sold off, and the whole concern wound up." Featherston-
haugh v. Fenwick, 17 Ves. 308, 19 Eng. Rul. Cas. 578.

40 See ante, c. 6, "Capital." The doctrine under consideration
"must be kept distinct from divisions of capital and repayment of
capital on winding up. It relates only to dividing profit and loss,
but does not alter the treatment of capital, as, if a debt, to be first
paid before profits are divided, and, in case of impairment, to be
repaid, less the equalization of losses." Bates, Partn. § 181.

soTaft v. Schwamb, 80 111. 289, Burdick's Cases, 577; Taylor v.
Coffing, 18 111. 422. Of course there is nothing to prevent the par-
ties from making such an agreement as they choose with regard to
the sharing of profit and loss. Paul v. Cullum, 132 U. S. 539; Welsh
v. Canfield, 60 Md. 469; Fleischmann v. Gottschalk, 70 Md. 523, 17

130 PARTNERSHIP PROPERTY.

In the absence of any proof as to what the agreement of the
partners was upon this point, it will be presumed that the
profits and losses were to be divided equally.51 This pre-
sumption <'t' equality prevails, whether the partners have con-
tributed to the capita] equally or unequally, whether they are
or are no! on a par as regards skill, connection, or character,
and whether they have or have not labored equally for the

Atl. 384. If there is an agreement as to the proportion in which
profits are to he shared, it will be presumed that losses are to be
borne in the same ratio, though there is no positive rule to that
effect. Flagg v. Stowe, 85 111. 164; Whitcomb v. Converse, 119 Mass.
38, 42, Burdick's Cases, 575, Mechem's Cases, 492; Moley v. Brine,
120 Mass. 324; Bates, Partn. § 181.

si Brewer v. Browne, 68 Ala. 210; Griggs v. Clark, 23 Cal. 427;
Ligare v. Peacock, 109 111. 94; Roach v. Perry, 16 111. 37; Taylor v.
Coffing, 18 111. 422; Farr v. Johnson, 25 111. 522; Henrickson v.
Reinback, 33 111. 299; Remick v. Emig, 42 111. 342; Flagg v. Stowe,
85 111. 164; Moore v. Bare, 11 Iowa, 198; Lee v. Lashbrooke, 8 Dana
(Ky.) 214; Wolfe v. Gilmer, 7 La. Ann. 583; Fleischmann v. Gotts-
chalk, 70 Md. 523, 17 Atl. 384; Harris v. Carter, 147 Mass. 313; Whit-
comb v. Converse, 119 Mass. 38, Burdick's Cases, 575, Mechem's
Cases, 492; Northrup v. McGill, 27 Mich. 234; Hutchinson v. Du-
bois, 45 Mich. 143, 7 N. W. 714; Randle v. Richardson, 53 Miss. 176;
Henry v. Bassett, 75 Mo. 89; Ratzer v. Ratzer, 28 N. J. Eq. 136;
Evans v. Warner, 20 App. Div. 230, 47 N. Y. Supp. 16; Ryder v. Gil-
bert, 16 Hun (N. Y.) 163; Van Name v. Van Name, 38 App. Div.
451, 56 N. Y. Supp. 659; Frazer v. Linton, 183 Pa. 186, 38 Atl. 589;
Peacock v. Peacock, 16 Ves. 49, 19 Eng. Rul. Cas. 549. There is a
presumption of law in favor of an equality of interest in case of
the property, as there is of the profits. Evans v. Warner, 20 App.
Div. 230, 47 N. Y. Supp. 16. "When a partnership relation is found
to exist, the presumption is that the partners have equal rights and
duties, and, if the right of one is simply in profits, that is to be es-
tablished by some evidence, or there are some facts to be found
from which it may be logically concluded." Earle v. Art Library
Pub. Co., 95 Fed. 548. The mere fact that the partners have carried
on the business for many years without an accounting between them
is insufficient to show that they had agreed to an unequal division
of earnings. Van Name v. Van Name, 38 App. Div. 451, 56 N. Y.
Supp. 659.

ATTACHMENT FOR DEBT. 137

benefit of the firm.52 This rule rests upon the consideration
that it is impossible for the court to set a proportionate value
on the sendees of each partner, where there is no express
agreement, since the worth of a particular member to the
firm may depend on many things besides the amount of cap-
ital brought- in by him.53

Attachment oe Execution foe Individual Debt of

Partner.

7 7 . The interest of_a partner in the firm property may ha
seized ancLsolcj^on attachment or execution for such
partner's individual debt.

78. Apurchaser at such sale takes subject tojthe equities of
the other partners and the firm creditors.

It is universally admitted that the interest of a partner in
the tangible property of the firm is liable to seizure and sale
upon attachment or execution in favor of his separate
creditor.54 "But while the right to levy is thus conceded,
the authorities differ widely as to the course to be pursued
by the creditor and the officer executing the writ. In some
cases the right of the officer to take goods, even temporarily,
out of the immediate possession and control of the other part-
ners, is denied, and, in others, a temporary interruption of

52 Taylor v. Coffing, 18 111. 422; Broadfoot v. Fraser, 73 Vt. 313,
50 Atl. 1054; Avritt v. Russell, 22 Ky. L. R. 752, 58 S. W. 811; Lindl.
Partn. p. 349.

58 Pollock, Partn. art. 32.

« Harris v. Phillips, 49 Ark. 58, 4 S. W. 196; Johnson v. Connecti-
cut Bank, 21 Conn. 148; Hurlbut v. Johnson, 74 111. 64; Aldrich v.
Wallace, 8 Dana (Ky.) 287; Choppin v. Wilson, 27 La. Ann. 444;
Lester v. Givens, 74 Mo. App. 395; Clements v. Jessup, 36 N. J. Eq.
569; James v. Burnet, 20 N. J. Law, 635; Nixon v. Nash, 12 Ohio St.
649; Hoaglin v. Henderson, 119 Iowa, 720, 94 N. W. 247.

138 PARTNERSHIP PROPERTY.

their possession, in order to take an inventory, is reluctantly
permitted : -till the decided weight of authority seems to be.
thai the officer may, and, for his own security and that of the
execution creditor, should, take possession of all the chattels

levied en, ami, after the sale of the debtor's interest therein,.
redeliver the same to the other partners and the purchaser,
who are said to be tenants in common of the chattels so
Bold."85

Whatever the practice in any particular jurisdiction may
be, it is well settled that the separate creditor or purchaser at
i le acquires only the beneficial interest of the debtor part-
ner, which, as has been seen, is merely his residuary share
after the partnership accounts are settled, and the rights of
the partners inter se adjusted.50 The purchaser acquires

56 Per Peck, J., in Nixon v. Nash, 12 Ohio St. 649. See, generally,
upon this subject, Andrews v. Keith, 34 Ala. 722; Wright v. Ward,
65 Cal. 525, 4 Pac. 534; Felt v. Cleghorn, 2 Colo. App. 4; Davis v.
White, 1 Houst. (Del.) 228; Anderson v. Chenney, 51 Ga. 372; New-
hall v. Buckingham, 14 111. 405; Williams v. Lewis, 115 Ind. 45, 17
N. E. 262, 7 Am. St. Rep. 403; Hubbard v. Curtis, 8 Iowa, 1, 74 Am.
Dec. 283; Hershfield v. Claflin, 25 Kan. 166, 37 Am. Rep. 237; White
v. Woodward, 8 B. Mon. (Ky.) 484; Vicory v. Strausbaugh, 78 Ky.
425; Moore v. Pennell, 52 Me. 162, 83 Am. Dec. 500; Hutchinson v.
Dubois, 45 Mich. 143, 7 N. W. 714; Barrett v. McKenzie, 24 Minn. 20 ;
Blumenfeld v. Seward Bros., 71 Miss. 342, 14 So. 442; Banks v.
Evans, 10 Smedes & M. (Miss.) 35; Lloyd v. Tracy, 53 Mo. App. 175;
Lester v. Givens, 74 Mo. App. 395; Morrison v. Blodgett, 8 N. H. 238,
29 Am. Dec. 653; Atkins v. Saxton, 77 N. Y. 195; Smith v. Orser, 42
N. Y. 132; Turner v. Smith, 1 Abb. Prac. (N. Y.; N. S.) 304; Gow
v. Hinton, 8 Abb. Prac. (N. Y.) 122; In re Smith, 16 Johns. (N. Y.)
102; Tredwell v. Rascoe, 3 Dev. Law (N. C.) 50; Deal v. Bogue, 20
Pa. 228; Richard v. Allen, 117 Pa. 199, 11 Atl. 552, 2 Am. St. Rep.
652; Saunders v. Bartlett, 12 Heisk. (Tenn.) 316; Canales v. Perez,
C5 Tex. 291; Snell v. Crowe, 3 Utah, 26, 5 Pac. 522; Shaver v. White,
i. Munf, (Va.) 110; Skavdale v. Moyer, 21 Wash. 10, 56 Pac. 841;
Heydon v. Heydon, 1 Salk. 392; Waters v. Taylor, 2 Ves. & B. 299;
West v. Skip, 1 Ves. Sr. 242; Parker v. Pistor, 3 Bos. & P. 288.

se Lester v. Givens, 74 Mo. App. 395; Nixon v. Nash, 12 Ohio St.
650.

ATTACHMENT FOR DEBT. 139>

merely a right in equity to call for an account, and thus en-
title himself to the interest of the partner in the property
which shall, upon such settlement, be ascertained to exist.57

.The officer cannot sell the entire property in any parjicnla-E-
g^ods-but must geizeand sell merely the debtor partner's in-
Iptoqj-, tViP-ppin 5S Indeed, it seems to be the better opinion
that the levy must be made upon the partner's interest in the
whole of the partnership effects, and not merely upon his in-
terest in specific articles,59 though, in many instances, only

57 1 Story, Eq. Jur. § 677; Cox v. Russell, 44 Iowa, 556; Nixon v.
Nash, 12 Ohio St. 650, 651; Clagett v. Kilbourne, 1 Black (U. S.)
346. If the sheriff, under a separate execution, levy upon and sell
the defendant's interest in the partnership property, he cannot de-
liver possession to the purchaser. He only acquires a right to an ac-
count. Deal v. Bogue, 20 Pa. 228. And see Lucas v. Laws, 27 Pa.
211; Reinheimer v. Hemingway, 35 Pa. 432.

ss White v. Jones, 38 111. 159; Williams v. Lewis, 115 Ind. 45, 17
N. E. 262, 7 Am. St. Rep. 403; Edgar v. Caldwell, Morris (Iowa)
434; Moore v. Pennell, 52 Me. 162, 83 Am. Dec. 500; Hutchinson v.
Dubois, 45 Mich. 143, 7 N. W. 714; Lester v. Givens, 74 Mo. App. 395;
Tappan v. Blaisdell, 5 N. H. 190; Morrison v. Blodgett, 8 N. H. 238,
29 Am. Dec. 653; Atkins v. Saxton, 77 N. Y. 195; Nixon v. Nash, 12
Ohio St. 649; Skavdale v. Moyer, 21 Wash. 10, 65 Pac. 841; Clagett
v. Kilbourne, 1 Black (U. S.) 346. A separate execution creditor
sells, not the chattels of the partnership, but the interest of the part-
ner, incumbered with joint debts, and the joint creditors have, there-
fore, no claim on the proceeds. Doner v. Stauffer, Rawle, P. & W.
(Pa.) 198, Burdick's Cases, 218. And see Lucas v. Laws, 27 Pa. 211;
Smith v. Emerson, 43 Pa. 456. Where partnership property is sold
under separate executions against the individual partners, the pro-
ceeds represent the several interests of the partners, and not that of
the firm. Vandike's Appeal, 57 Pa. 9. See Flanagan v. McAffee, 1
Phila. (Pa.) 75.

so Daniel v. Owens, 70 Ala. 297; Church v. Knox, 2 Conn. 514;
Gerard v. Bates, 124 111. 150, 7 Am. St. Rep. 350; Stumph v. Bauer,
76 Ind. 157; Sirrine v. Briggs, 31 Mich. 443; Shaver v. White, 6
Munf. (Va.) 110; Wayt v. Peck, 9 Leigh (Va.) 434.

A levy on an undivided half of a portion of partnership property
owned equally by two partners, is invalid, where the judgment is
against one of the partners individually. Ernest v. Woodworth, 124
Mich. 1, 82 N. W. 661.

140 PARTNERSHIP PROPERTY.

;i part of the u"<:<ls have been seized, and the undivided share
in separate articles has been sold to different individuals.00

Garnishment.

As to whether a partner's interest may be reached by gar-
nishment of the firm, the better opinion would seem to be that
it cannot,008, but garnishment has been allowed under pecu-
liar circumstances.0015

CONTEBSION OF FlR.M REALTY InTO PERSONALTY.

In England, partnership realty is deemed personalty
for all purposes, in the absence of an agreement to_the.
contrary.

In the United States, partnership realty is deemed per-.
sonalty only so far as the exigencies of a settlement .of
the firm business may require, in the absence of an
agreement that it shall be treated as personalty for all
purposes.

The English rule, after many fluctuations, became settled
that partnership really is ipso facto, in the view of a court
of equity, converted into personalty for all purposes, as well
for the purpose of the adjustment of the partnership debts

eo Felt v. Cleghorn, 2 Colo. App. 4; Hershfield v. Claflin, 25 Kan.
166, 37 Am. Rep. 237; Morrison v. Blodgett, 8 N. H. 238; Phillips v.
Cook, 24 Wend. (N. Y.) 389; Dutton v. Morrison, 17 Ves. 205; Waters
v. Taylor, 2 Ves. & B. 301. See Lester v. Givens, 74 Mo. App. 399.

eoaFewell v. American Surety Co., 80 Miss. 782, 28 So. 755, 92
Am. St. Rep. 625; Siegel, Cooper & Co. v. Schueck, 167 111. 522, 47
N. E. 855.

sob "Where a creditor of a partner seeks an accounting of the
partnership matters, and the subjection of the partner's interest to
the payment of a debt, he may have garnishment to reach such

CONVERSION OF REALTY. 141

and the claims of the partners inter se as for the purpose of
determining the succession as between the personal represen-
tatives of a deceased partner and the heirs at law.61 ^ This
rule has since been expressly declared by statute.62 Lindlcy,
in his work on Partnership, bases the rule on the nature of
the interest of each partner in the partnership property. He
says: "From the principle that a share of a partner is
nothing more than his proportion of "the partnership assets
after they have been turned into money and applied in liquid-
ation of the partnership debts, it necessarily follows that, in
equity, a share in a partnership, whether its property consists
in lands or not, must, as between the real and personal repre-
sentatives of a deceased partner, be deemed to be personal
and not real estate, unless, indeed, such conversion is inconsis-
tent with the agreement between the parties."6 It is con-
debtor's individual interest in a debt alleged to be owing to tbe
firm." O. S. Kelly Co. v. Zarecor (Tenn. Ch. App.) 62 S. W. 189.

ciCrawshay v. Maule, 1 Swanst. 495; Darby v Darby, 3 Drewry,
495, Ames' Cas. 177; Essex v. Essex, 20 Beav. 442; Thornton v. Dixon,
3 Brown Ch. 199, Ames' Cas. 175; Selkrig v. Davies, 2 Dow, 230;
Darrow v. Calkins, 154 N. Y. 503, 49 N. E. 61.

•-English Partnership Act 1890 (53 & 54 Vict. c. 39) §§ 20, 22.
See, also, Enc. Laws Eng. tit. "Partnership."

G3Lindl. Partn. p. 687. The English doctrine is also said to have
grown out of the peculiar law of inheritance in England, being in-
tended to remedy the hardship of the rule which excludes all
but the eldest child from the inheritance, and of the other rule
which exempts real estate in the hands of the heir from all but the
specialty debts of the ancestor. See Fairchild v. Fairchild, 64 N. Y.
471; Darrow v. Calkins, 154 N. Y. 503, 49 N. E. 61; Shearer v.
Shearer, 98 Mass. 114. Prof. Burdick deems the suggestion "purely
fanciful." Burdick, Partn. p. 87. See, also, Cookson v. Cookson, 8
Sim. 529, cited in Shearer v. Shearer, 98 Mass. 107, Ames' Cas. 185.
In the case of Pierce's Adm'r v. Trigg's Heirs, 10 Leigh (Va.) 406,
Judge Tucker says: "It has been a vexed question in England,
whether the interest of the deceased partner in the real estate, and
the proceeds of the sale of that interest, belong to the personal rep-
resentatives or to the heir. The better opinion gives the fund to
the former, since, upon familiar principles, as the land was pur-

142 PARTNERSHIP PROPERTY.

ceded that the intention of the parties will prevent an "out
and out" conversion, where that intention is manifested.

The general doctrine of "out and out" conversion adopted
by t lie English courts has not been followed to its full extent
in the United States, and there seems to be no sufficient rea-
son why it should be.64 "The clear current of the American
decisions supports the rule1 that, in the absence of any agree-
ment, express or implied, between the partners to the contrary
partnership real estate retains its character as realty, with all
the incidents of that species of property, between the partners
themselves, and also between a surviving partner and the
real and personal representatives of a deceased partner, ex-
cept that each share is impressed with a trust implied by law
in favor of the other partner, that, so far as is necessary, it
shall be first applied to the adjustment of partnership obli-
gations, and the payment of any balance found to be due
from the one partner to the other on winding up the partner-
ship affairs. To the extent necessary for these purposes, the
character of the property is in equity deemed to be changed

chased with the personalty, and was brought into the firm as stock,
it ought, as between the executor and the heir, to replace the fund
withdrawn from the personal estate. By placing it as stock in the
partnership fund, the deceased evidenced a design to treat it as per-
sonalty, and it ought to go accordingly. The representatives of the
deceased can claim it only as stock, and as stock in trade it is, ex vi
termini, personal."

64 "There is no policy growing out of our laws of inheritance or
the exemption of lands from liability for simple contract debts,
which requires the application of such doctrine here. The lands
of the ancestor are assets for the payment of all debts, and the per-
sons who take by descent and under the statute of distribution are
substantially the same. The necessity for an absolute conversion,
supposed to be found in the nature of the partnership interest, seems
hardly sufficient to justify a fiction which should deprive real estate
of a partnership of its descendible quality, when it is admitted on
all hands that partnership real estate, if the necessity arises, is
first subject to be appropriated in equity to the discharge of part-
nership obligations, and the adjustment of the equities between the
parties." Darrow v. Calkins, 154 N. Y. 503, 49 N. E. 61.

CONVERSION OF REALTY. 143

into personalty. On the death of either partner, where the
title is vested in both, the share of the land standing in the
name of the deceased partner descends as real estate to his
heirs, subject to the equity of the surviving partner to have
it appropriated to accomplish the trust to which it was pri-
marily subjected. The working out of the mutual rights
which grew out of the partnership relation does not seem to
require that the character of the property should .be changed
until the occasion arises for a conversion, and then only to
the extent required. The American rule commends itself
for its simplicity. It makes the legal title subservient in
equity to the original trust. It disturbs it no further than is
necessary for this purpose. The portion of the land not re-
quired for partnership equities retains its character as realty,
and it leaves the laws of inheritance and descent to their or-
dinary operation."65 If, as sometimes happens, the title to

05 Darrow v. Calkins, 154 N. Y. 503, 49 N. E. 61. See, also, Col-
lumb v. Read, 24 N. Y. 505; Fairchild v. Fairchild, 64 N. Y. 471;
Buchan v. Sumner, 2 Barb. Ch. (N. Y. ) 165; Shearer v. Shearer, 98
Mass. 114; Shanks v. Klein, 104 U. S. 18, Mechem's Cases, 164; Gray
v. Palmer, 9 Cal. 637; Strong v. Lord, 107 111. 25; Robinson Bank v.
Miller, 153 111. 244, 38 N. E. 1078, Burdick's Cases, 165, Mechem's
Cases, 155; Pepper v. Pepper, 24 111. App. 316; Galbraith v. Tracy,
153 111. 54, 38 N. E. 937; Matlock v. Matlock, 5 Ind. 403; Paige v.
Paige, 71 Iowa, 318, 32 N. W. 360, Mechem's Cases, 170; Galbraith
v. Gedge, 16 B. Mon. (Ky.) 631; Goodburn v. Stevens, 5 Gill. (Md.)
1; Dyer v. Clark, 5 Mete. (Mass.) 562; Harris v. Harris, 153 Mass.
439, 26 N. E. 1117; Moran v. Palmer. 13 Mich. 367; Godfrey v. White,
43 Mich. 171, 5 N. W. 243; Woodward-Holmes Co. v. Nudd, 58 Minn.
236, 59 N. W. 1010, Burdick's Cases, 179; Willet v. Brown, 65 Mo.
138; Buckley v. Buckley, 11 Barb. (N. Y.) 43; Williams v. Gillies,
75 N. Y. 197, Burdick's Cases, 290; Ludlow's Heirs v. Cooper's
Devisees, 4 Ohio St. 9; West Hickory Min. Ass'n v. Reed, 80 Pa. 38;
Moderwell v. Mullison, 21 Pa. 257; Foster's Appeal, 74 Pa. 391; Ap-
peal of Haeberly, 191 Pa. 239, 43 Atl. 207; Pierce v. Covert, 39 Wis.
252; Martin v. Morris, 62 Wis. 418, 22 N. W. 525; Riddle v. White-
hill, 135 U. S. 621; In re Codding, 9 Fed. 849.

"In this view of the grounds and purpose of such equitable con-
version, even regarding all partnership real estate, however the legal

144 PARTNERSHIP PROPERTY.

partnership real estate is in the name of one of the partners
only, "ii the death of the other partner, his equitable title
descends to his heirs, or goes to his devisees, but subject to
the primary claims growing cut of the partnership relation.60

title may be held, as held in trust for the partnership, this court is
disposed to hold, notwithstanding the great weight of authority to
the contrary elsewhere, that such real estate is to be converted into
personalty only when such conversion is required for the payment
of claims against the partnership which are in the nature of debt.
Balances due to individual partners for advances to the firm, or for
payments made in its behalf, come within this definition. So, also,
may capital furnished by one partner, when, by the terms upon
which it was furnished, or from the nature and necessity of the case,
it is to be repaid in specific amounts, in order to reach the net result,
or body of the partnership interests, to which the proportional rights
or shares of the several partners attach. In short, whatever is re-
quired to be paid or measured in precise sums must be so adjusted;
and real estate, converted for that purpose, undoubtedly becomes
personalty, and is to be distributed as such when paid over to the
party entitled. But the shares in the body of the partnership prop-
erty— those interests which are not measured by precise amount, but
consist in a common proprietorship after all special claims are sat-
isfied— stand upon different footing. These interests are determined
by the proportions fixed by the articles or organic law of the part-
nership. When the beneficial interests and the legal title correspond,
it has already been decided that the rights of the partners in real
estate so held will be left to adjust themselves by the descent of the
legal title, with its incidents, as real estate of the several partners
held in common. Wilcox v. Wilcox, 13 Allen (Mass.) 252. When
the legal title is otherwise held, it is held in trust, and the equitable
title descends in like manner, and with like incidents, except as to
dower. The office of equity in such case is merely to declare the
trusts, and compel the legal title to serve the equitable interests.
This is accomplished by directing such conveyances as will make the
legal title of the several parties conform to their respective bene-
ficial interests." Shearer v. Shearer, 98 Mass. 107, Ames' Cas. 185.

' Alter the debts of a partnership have been paid, the land belong-
ing to the partnership is considered realty, and not personalty, for
purposes of distribution on dissolution, so that the heirs of a de-
ceased partner are entitled to partition." Comstock v. McDonald,
126 Mich. 142, 85 N. W. 579.

oe Darrow v. Calkins, 154 N. Y. 503, 49 N. E. 61, citing Fairchild
v. Fairchild, 64 N. Y. 471.

CONVERSION OF REALTY. 145

It has already been seen that, upon the death of the partner'
holding the legal title, the equitable title of the firm passes-
to the survivors, while the legal title descends to the heirs,
but in trust, to apply it so far as necessary to partnership
purposes.67 The widow of a deceased partner is entitled to
dower in the partnership lands which remain after the claims
of the creditors and other partners have been satisfied.68

It is generally conceded in all jurisdictions that the ques-
tion whether partnership real estate shall be deemed abso-
lutely converted into personalty for all purposes, or only con-
verted pro tanto for the purpose of partnership equities, may
be controlled by the express or implied agreement, of the part-
ners themselves, and that where, by such agreement, it ap-
pears that it was the intention of the partners that the lands
should be treated and administered as personalty for all pur-
poses, effect will be given thereto.69

07 See supra, §§ 69-71.

c8 Brewer v. Browne, 68 Ala. 210; Lenow v. Fones, 48 Ark. 557;
Bopp v. Fox, 63 111. 540; Strong v. Lord, 107 111. 25; Galbraith v.
Gedge, 16 B. Mon. (Ky.) 631; Hill v. Cornwall & Bro.'s Assignee, 95
Ky. 512, 26 S. W. 540, Burdick's Cases, 474; Goodburn v. Stevens, 5
Gill (Md.) 1; Dyer v. Clark, 5 Mete. (Mass.) 562; Woodward-Holmes
Co. v. Nudd, 58 Minn. 236, 59 N. W. 1010, Burdick's Cases, 179; War-
fel v. Calder, 8 Lane. Bar. (Pa.) 205. The widow and heirs have
only an interest in the net discharged property after all the partner-
ship debts are discharged. Gray v. Palmer, 9 Cal. 640. The widow
of a deceased partner has no dower in lands conveyed during the
continuance of the partnership, although she did not join in the
deed. Woodward-Holmes Co. v. Nudd, 58 Minn. 236, Burdick's Cases,
179. But compare Fairchild v. Fairchild, 64 N. Y. 471; Pugh's Heirs
v. Currie, 5 Ala. 446.

oo Fall River Whaling Co. v. Borden, 10 Cush. (Mass.) 462; Dar-
row v. Calkins, 154 N. Y. 503, 49 N. B. 61; Maddock v. Astbury, 32
N. J. Eq. 181; Ludlow's Heirs v. Cooper's Devisees, 4 Ohio St. 9;
Leaf's Appeal, 105 Pa. 505. "In respect to real estate purchased for
partnership purposes with partnership funds, and used in the part-
nership business, the English rule of 'out and out' conversion may
be regarded as properly applied on the ground of intention, even in

10

14G PARTNERSHIP PROPERTY.

Changing Joint Into Separate Property, and
Vice Versa.

81. In the absence of fraud, the partners may by mutuaj
agreement, convert firm property into separate prop-
erty, or separate property into firm property.")

This rule follows logically from the rule already con-
sidered, that the agreement and intention of the parties deter-
mines what is partnership property, and what is not. But
as an agreement changing the character of property from
joint to separate or vice versa is, is effect, a conveyance of
such property, it is subject to the rules of law with respect
to fraudulent conveyances. It is more convenient to con-
sider these rules in connection with the rights and liabilities
of partners as third persons. It is accordingly reserved for
a later chapter.70

jurisdictions which have not adopted that rule as applied to partner-
ship real estate acquired under different circumstances, and where
no specific intention appeared." Darrow v. Calkins, 154 N. Y. 503,
49 N. E. 61. See, also, Collumb v. Read, 24 N. Y. 505. Where land
is purchased by several persons, not for permanent use, but for pur-
poses of sale for profit, it may be regarded in equity as personal
property among the partners in the speculation. Nicoll v. Ogden,
29 111. 323. Followed by Mauck v. Mauck, 54 111. 281; Faulds v. Yates,
57 111. 416; Morrill v. Colehour, 82 111. 618. Compare Smith v. Ram-
sey, 1 Gilm. (111.) 373. See, also, Jones v. Davies, 60 Kan. 309, 56
Pac. 484. A stipulation in the partnership articles that "all the real
estate whatever belonging to the said firm shall be, and is hereby,
considered as part of the joint stock and funds of said firm, and as
possessing all the incidents and liabilities of partnership funds and
personal property, and is hereby by the parties fully impressed with
such incidents and liabilities," works a total conversion of the realty
into personalty. Davis v. Smith, 82 Ala. 198, 2 So. 897, Burdick's
Cases, 182. For the peculiar doctrine that prevails in Kentucky,
see Pars. Partn. (4th Ed.) § 272, note 1. See, also, Ludlow's Heirs
v. Cooper's Devisees, 4 Ohio St. 9, wherein an agreement set out was
held to work a conversion 'out and out."
to See post, c. 9.

3

CHAPTER VIII.

RIGHTS AND LIABILITIES OF PARTNERS INTER SE.

82. Articles of Partnership.

83. Construction of Articles.

84. Right to Participate in Management.

85. Duty to Observe Good Faith.

86. Obtaining Private Benefits.

87-88. Right to Carry on Separate Business.

89. Right to Contribution and Indemnity.

90. Right to Compensation.
91-92. Right to Interest on Balances.

93. Partnership Accounts.

94. Duty to Conform to Partnership Articles.

95. Duty to Exercise Care and Skill.
96-98. Power of Majority.

99-100. Division of Profits.
101. Expulsion of Partner.
101-103. Partner's Lien.

Articles of Partnership.

82. The formal written agreement definingthe respective

rights and liabilities of the partners is known as the
"Articles of Partr

"When persons deliberately enter into partnership with
each other, it is usual for them to enter into a formal written
contract defining their respective rights, duties,, and bmhjl-
jiioflr This formal agreement is called the "Articles of Part-
nership." It is always desirable to have formal articles, in
order that the partners may know definitely what their rights,
duties, and liabilities are, and to remove any opportunity for

14S RIGHTS OF PARTNERS.

controversy in thai respecl ; bul unless the partners wish their
rights and liabilities to be different from whal the law will
imply in the absence of special contract on the subject, formal
articles are uol necessary, ami the law will fix their respective
rights and liabilities. Some of the principal rights, duties
and liabilities of partners are considered in the succeeding sec-
t ions of this chapter.

('sua! Provisions in Articles.

h is generally possible, by express agreement, for part-
ners to make their respective rights and liabilities whatever
they see fit.1

It is usual to insert in formal articles provisions declaring
the agreement of the partners with respect to some or all of
the following subjects, viz. : The general nature of the busi-
ness; the commencement and duration of the relation; the
name or style of the firm; the capital, advances, and shares
of the respective partners; the conduct and powers of the part-
ners; the firm property; the distribution of profits; accounts;
transfer of shares; the dissolution and winding up of the
firm. Any other special agreement upon any subject con-
nected with the partnership may be inserted. In this con-
nection it has been well said that partnership articles are in-
tended for the guidance of persons who are not lawyers, and
that therefore it is not wise to insert only such provisions as
are necessary to exclude the application of rules of law which
apply where nothing is said to the contrary. "The articles
should be so drawn as to be a code of directions, to which the
partners may refer as a guide in all their transactions, and

i Crawshay v. Collins, 15 Ves. 226; Townsend v. Goewey, 19 Wend.
(N. Y.) 424; Hall v. Sannoner, 44 Ark. 34; Mann v. Butler, 2 Barb.
Ch. (N. Y.) 362. "The duties and obligations arising from the re-
lation between the parties are regulated by the express contract be-
tween them so far as the express contract extends and continues in
force." Smith v. Jeyes, 4 Beav. 505.

ARTICLES OF PARTNERSHIP. 149

upon which they may settle among themselves differences
which may arise, without having recourse to courts of jus-
tice."2

Same — Construction- of Articles.

83. The true meaning of the articles of partnership is de-

termined by the ordinary rules governing the construc-
tion of contracts.

While the ordinary rules for the construction of contracts
apply to partnership articles,3 several rules with respect to
the construction of partnership articles have taken a more
definite shape.

In the first place, partnership articles are not intended to
define, and are not construed as defining, all the rights and
obligations of the partners inter se. A good deal is left to
be understood.4 "The transactions of partners with each
other cannot be considered merely with reference to the ex-
press contract between them. The duties and obligations
arising from the relation between the parties are regulated by
the express contract between them so far as the express con-
tract extends and continues in force ; but if the express con-
tract, or so much of it as continues in force, does not reach to
all those duties and obligations, they are implied and en-
forced by law."5

sLindl. Partn. pp. 411, 412.

3 Bird v. Hamilton, Walk. Ch. (Mich.) 361. Where the language
used leaves the matter in doubt, a practical construction put upon
it by the partners themselves by a course of conduct for a consid-
erable period will be conclusive. Winchester v. Glazier, 152 Mass.
316, 25 N. E. 728; Snyder v. Seaman, 2 App. Div. 258, 37 N. Y. Supp.
696. All prior negotiations, proposals, guaranties, etc., are merged
in the partnership articles. Evans v. Hanson, 42 111. 234.

*Lindl. Partn. p. 406.

b Smith v. Jeyes, 4 Beav. 505. See, also, Blisset v. Daniel, 10 Hare,
522; Crawshay v. Collins, 15 Ves. 226.

150 RIGHTS OF PARTNERS.

Another rule of construction is that partnership articles
must be construed with reference to the objects of the part-
nership. All the provisions of the articles are to be construed
so as to advance, and not to defeat, those objects. However
general the language used may be, it will be restricted to this
end.6 This rule is of special importance in considering the
limits of general powers conferred upon some of the partners,
or upon a majority.7

Any provision, however worded, will if possible, be con-
strued so as to defeat any attempl by one partner to avail him-
self of it for the purpose of defrauding his copartner, or of
taking and unfair advantage.8

Any_ provision in the articles, hojgfi%ex_express, may be
varied or waived and abandoned by the consent oFall the part"
ners, and this consent may be evidenced not only by express
words, but by their conduct.9

cLindl. Partn. p. 407. See, also, Chappie v. Cadell, Jac. 537. A
partner may insist upon a sale and distribution of the partnership
property at the time fixed by the partnership articles, though it is
not for the interest of the firm. Mann v. Butler, 2 Barb. Ch. (N. Y.)
362.

7 See infra, § 96, "Powers of Majority."

sPettyt v. Janeson, 6 Madd. 146; Blisset v. Daniel, 10 Hare, 493.
See, also, infra, § 96, "Powers of Majority."

o Const v. Harris, Turn. & R. 496; Gage v. Parmelee, 87 111. 329;
Gregg v. Hord, 129 111. 613, 22 N. E. 528; Thomas v. Lines, 83 N. C.
191; Geddes v. Wallace, 2 Bligh, 270; Henry v. Jackson, 37 Vt. 431.
"With respect to a partnership agreement, it is to be observed that,
all parties being competent to act as they please, they may put an
end to or vary it at any moment. A partnership agreement is there-
fore open to variation from day to day, and the terms of such varia-
tion may not only be evidenced by writing, but also by the conduct
of the parties in relation to the agreement and to their mode of con-
ducting their business." England v. Curling, 8 Beav. 133, 19 Eng.
Rul. Cas. 601. A written agreement as to dividing profits may be
extended tacitly by the mutual understanding of the parties, or by
their conduct in relation to it. Robbins v. Laswell, 27 111. 365. A
waiver or modification of an express provision may be inferred from

TO PARTICIPATE IN MANAGEMENT. 151

If a partnership originally entered into for a definite term
is continued after the expiration of that term, without any
new agreement, the articles under which the partnership was
first carried on continue, so far as they are applicable, to reg-
ulate the rights and liabilities of the partners,10 but the part-
nership will be a partnership at will.11 sy

Right to Participate ix Management.

84. Each member of a partnership is entitled prima facie
to take part in its management.

In the absence of an express agreement to the contrary, the
powers of the members of a partnership are equal, even
though their shares may be unequal, and there is no right on
the part of one or more to exclude another from an equal man-
agement in the concern.12

a long course of dealing inconsistent with such provision. McCall
v. Moss, 112 111. 493. Where by the partnership agreement a partner
is to have a commission on sales made by him, his right thereto is
not affected by the fact that he makes no claim therefor during the
continuance of the partnership. Askew v. Springer, 111 111. 662.

10 Sangston v. Hack, 52 Md. 173; Boardman v. Close, 44 Iowa, 428;
Metcalfe v. Bradshaw, 145 111. 124, 33 N. E. 1116; Mifflin v. Smith, 17
Serg. & R. (Pa.) 165; King-v. Chuck, 17 Beav. 325; Essex v. Essex,
20 Beav. 442. Compare Wilson v. Simpson, 89 N. Y. 619. Where a
new partner is admitted, and there is no express continuance of the
original articles, it has been held that provisions of the original
articles are annulled. Givens v. Berry, 21 Ky. L. R. 680, 52 S. W.
942.

" Lindl. Partn. p. 410.

i2Lindl. Partn. p. 301. "In partnerships, the good faith of the
partners is pledged mutually to each other that the business shall
be conducted with their actual personal interposition, so that each
may see that the other is carrying it on for their mutual advantage."
Per Lord Eldon in Peacock v. Peacock, 16 Ves. 51. See, also, Katz
v. Brewington, 71 Md. 79, 20 Atl. 139.

152 RIGHTS OF PARTNERS.

It is of course competent for partners to agree that one or
more of them Bhall take no active pari in the management of
the partnership affairs, and where they do so agree, such part-
ners have no right to transaol partnership business, or to
bind the firm. Nevertheless, the powers of partners being
presumptively equal, a third person dealing with a partner
Vt ithout notice of any limitation upon his authority may hold
the firm liable to him, just as though the authority had been
rightfully exercised,13 but of course such partner will be
liable to his copartners for any loss resulting to them from
his unauthorized act.

Duty to Observe Good Faith.

85. Partners must observe the utmost good faith towards
each other in all their transactions.

The utmost good faith is due from every member of a part-
nership toward- every other member.14 This obligation to
perfect fairness and good faith is not confined to persons who

is See post, c. 9, "Rights and Liabilities of Partners as to Third
Persons."

11 Piatt v. Piatt, 2 Thomp. & C. 39; Lockwood v. Beckwith, 6 Mich.
168; Coursin's Appeal, 79 Pa. 220; Lay v. Emery, 8 N. D. 404, 79 N.
W. 1053. In Roby v. Colehour, 135 111. 300, 338, 25 N. E. 777, the
court said: "In cases of partnerships, which usually involve also
the relations of joint ownership, trust, and agency, the utmost good
faith is due from every member of the partnership toward every
other member; and if any dispute arises between partners touching
any transaction by which one seeks to benefit himself at the expense
of the firm, he will be required to show not only that he has the law
on his side, but that his conduct will bear to be tried by the highest
standard of honor." "Partners, in all the scope of the partnership
business, in all dealings with each other as to partnership affairs or
property, stand in a fiduciary relation, the one to the other, and are
bound to the uberrima fides of such relation. The essential idea was

AS TO GOOD FAITH. 153

actually are partners. It extends to persons negotiating for
a partnership, but between whom no partnership as yet ex-
ists,15 and also to persons who have dissolved partnership, but
who have not completely wound up and settled the partner-
ship affairs.16 The sale of a partnership interest by one part-
ner to another will be sustained only when made for a fair
consideration, and upon a full disclosure of all information
as to the value of the property.17 This requirement of good
faith has been said to be the basis of the law of partnership
so far as it relates to the rights and obligations of the partners
between themselves.18

well expressed by Stone, C. J., in Goldsmith v. Eichold, 94 Ala. 116,
10 So. 80. 'Each partner is, in one sense, a trustee — a trustee for
the newly-created entity, the partnership, and for each member
of the firm, who thus becomes a beneficiary under the trust. He
is more — he is a trustee and a cestui que trust. A trustee, so far
as his own duties bind him; a cestui que trust, so far as his duties
rest on his copartners. And it is sometimes said that each partner
is both principal and agent — a principal to the extent he represents
his own interest, but an agent so far as he represents his copart-
ners.' " Bestor v. Barker, 106 Ala. 240, 17 So. 389.

is Bloom v. Lofgren, 64 Minn. 1, 65 N. W. 960, Burdick's Cases,
501; Hichens v. Congreve, 1 Rus. & M. 150; Harlow v. La Brum, 151
N. Y. 278, 45 N. E. 859, Burdick's Cases, 502; Esmond v. Seeley, 28
App. Div. 292, 51 N. Y. Supp. 36; Densmore Oil Co. v. Densmore, 64
Pa. 43. But see Uhler v. Semple, 20 N. J. Eq. 288, holding that the
rule of caveat emptor applies to persons bargaining with each other
for a partnership.

icLindl. Partn. p. 569; Renfrow v. Pearce, 68 111. 125; Pierce v.
McClelland, 93 111. 245; Wells v. McGeoch, 71 Wis. 196, 35 N. W. 769.

17 Warren v. Schainwald. 62 Cal. 56; Meyers v. Merillion, 118 Cal.
352, 50 Pac. 662; Baker v. Cummings, 4 App. Cas. (D. C.) 230; Pom-
eroy v. Benton, 57 Mo. 531; Wright v. Duke, 91 Hun, 409, 36 N. Y.
Supp. 853; Sexton v. Sexton, 9 Grat. (Va.) 204.

isLindl. Partn. p. 304.

15 i RIGHTS OF PARTNERS.

Same — Obtaining Private Benefits.

86. A partner will not be permitted to obtain for himself
profits or benefits arising from a transaction concerning
firm interests.

"It is clear that every partner musl account to the firm for
every benefit derived by him, without the consent of his co-
partners, from any transaction concerning the partnership,
or from any use by him of the partnership property, name,
or business connection."19 A partner cannot secure for him-
self that which it is his duty to obtain, if at all, for the firm.20
"Good faith requires that a partner shall not obtain a private
advantage at the expense of the firm. He is bound, in all
transactions affecting the partnership, to do his best for the
common body, and to share with his copartners any benefit
which he may have been able to obtain from other people, and

it>Aas v. Benham, [1891] 2 Ch. 255, 65 Law Times (N. S.) 25, 19
Eng. Rul. Cas. 589. See, also, Raymond v. Vaughn, 18 111. 256. In
Latta v. Kilbourn, 150 U. S. 524, 541, Burdick's Cases, 503, Mechem's
Cases, 212, Mr. Justice Jackson, speaking for the court, said that it
is "well settled that one partner cannot, directly or indirectly, use
partnership assets for his own benefit; that he cannot, in conducting
the business of a partnership, take any profit clandestinely for him-
self; that he cannot carry on the business of the partnership for his
private advantage; that he cannot carry on another business in com-
petition or rivalry with that of the firm, thereby depriving it of the
benefit of his time, skill, and fidelity, without being accountable to
his copartners for any profit that may accrue to him therefrom; that
he cannot be permitted to secure for himself that which it is his
duty to obtain, if at all, for the firm of which he is a member; nor
can he avail himself of knowledge or information which may be
properly regarded as the property of the partnership, in the sense
that it is available or useful to the firm for any purpose within the
scope of the partnership business."

-oKimberly v. Arms, 129 U. S. 512; Hill v. Miller, 78 Cal. 149;
Tebbetts v. Dearborn, 74 Me. 392; Filbrun v. Ivers, 92 Mo. 388, 4 S.
W. 674; Coursin's Appeal, 79 Pa. 220.

AS TO GOOD FAITH. 155

in which the firm is, in honor and conscience, entitled to par-
ticipate."21 Thus, a partner cannot buy up a claim against
the firm. If he takes an assignment of such a claim, he holds
it for the firm, and is entitled to charge against the firm only
the amount he actually paid out.22 So, a partner cannot ac-
quire an adverse title or interest in the property of the part-
nership, and hold it against the firm.23 A partner who
secretly obtains in his own name a renewal of the lease of the
premises upon which the firm transacts business must hold it
for the firm.24 If a partner is buying or selling property for
a firm, he cannot sell to it or buy from it at a profit to him-

21 Lindl. Partn. p. 305; Carter v. Home, 1 Eq. Cas. Abr. 7.

22Easton v. Strouther, 57 Iowa, 506, 10 N. W. 877; Pilbrun v.
Ivers, 92 Mo. 388, 4 S. W. 674. It operates as payment of the claim
in the absence of some equity to keep it alive. Coleman v. Coleman,
78 Ind. 344; Booth v. Farmers' & Mechanics' Nat. Bank, 74 N. Y. 228.

asCrosswell v. Lehman, 54 Ala. 363; Laffan v. Naglee, 9 Cal. 662;
Roby v. Colehour, 135 111. 300, 25 N. E. 777; Anderson v. Lemon, 8
N. Y. 236; "Weston v. Ketcham, 7 Jones & S. 54; Eakin v. Shumaker,
12 Tex. 51; Forrer v. Forrer's Ex'rs, 29 Grat. (Va.) 134; Kinsman
v. Parkhurst, 18 How. 289; Washburn v. Washburn, 23 Vt. 576. In
the case of Miller v. O'Boyle, 89 Fed. 140, plaintiff and defend-
ant entered into a partnership for the purpose of carrying out a
contract for public work awarded to them as associates by a Mexican
city. Defendant, who was to furnish the money for the enterprise,
went to Mexico for the purpose of closing up the contract, and fur-
nishing the required bonds. Owing to the receipt of a false report
affecting the financial standing of plaintiff, the authorities refused
to close the contract with him as a party. Defendant, without ad-
vising plaintiff of the reasons for such refusal, and without plaint-
iff's knowledge, obtained a contract for the work in his own name.
It was held that he held such contract for the partnership, and that
plaintiff was entitled to a preliminary injunction to prevent his ex-
clusion from participating in the management of the business.

24Sneed v. Deal, 53 Ark. 152, 13 S. W. 799; Leach v. Leach, IS
Pick. (Mass.) 68; Struthers v. Pearce, 51 N. Y. 357; Mitchell v.
Reed, 61 N. Y. 123; Johnson's Appeal, 115 Pa. 129, 8 Atl. 36. Com-
pare Chittenden v. Witbeck, 50 Mich. 401, 15 N. W. 526; Phillips v.
Reeder, 18 N. J. Eq. 95.

L56 RIGHTS OF PARTNERS.

-elf.1-'"' Any reward or commissions which a partner obtains
from third persons for inducing (he linn to enter into partic-
ular transactions must be accounted for to the firm.20

Information Acquired as Partner.

If a member of a partnership firm avails himself of infor-
mation obtained by him in the course of the transaction of
partnership business, or by reason of his connection with the
firm, for any purpose within the scope of the partnership busi-
ness, or for any purpose which would compete with (he part-
nership business, he is liable to account to the firm for any
benefil he may obtain from the use of such information; but
if he uses the information for purposes which are wholly with-
out the scope of the partnership business, and not competing
with it, the firm is not entitled to an account of such benefit.-7

25 Nelson v. Hayner, 66 111. 487; Emery v. Parrott, 107 Mass. 95;
Comstock v. Buchanan, 57 Barb. (N. Y.) 127; Bentley v. Craven, IS
Beav. 75; Dunne v. English, 18 Eq. Cas. 524. A partner is, by virtue
of the partnership relation, incapacitated to purchase or deal in the
partnership property for his own benefit, and his purchase will be
held to be in trust for the benefit of the copartnership. Winstanley
v. Gleyre, 146 111. 27, 34 N. E. 628.

-«> Hodge v. Twitchell, 33 Minn. 389, 23 N. W. 547; Newell v. Coch-
ran, 41 Minn. 374, 43 N. W. 84; Whitman v. Bowden, 27 S. C. 53, 2
S. E. 630; Grant v. Hardy, 33 Wis. 668. See Short v. Stevenson, 63
Pa. 95. A contract between a partner and a third party, that such
a commission should be paid, is void. Gleason v. Chicago, M. &
St. P. R. Co. (Iowa), 43 N. W. 517.

27Aas v. Benham [1891], 2 Ch. 244, 65 Law Times (N. S.) 25, 19
Eng. Rul. Cas. 582; Latta v. Kilbourn, 150 U. S. 524, Burdick's Cases,
503, Mechem's Cases, 212. Compare Cassels v. Stewart, L. R. 6 App.
Cas. 64. "As regards the use by a partner of information obtained
by him in the course of the transaction of partnership business, or
by reason of his connection with the firm, the principle is that, if
he avails himself of it for any purpose which is within the scope
of the partnership business, or of any competing business, the profits
of which belong to the firm, he must account to the firm, for any
benefits which he may have derived from such information; but
there is no principle or authority which entitles a firm to benefits

AS TO SEPARATE BUSINESS.

Eight to Carry ox Separate Business.

87. Apartner has np ri^ht to carry on a separate business
in competition with the firm.

88. In the absence of any agreement to the contrary, a
partner may carry on a separate non-competing busi-
ness.

Competing Business.

It is clear that a partner is not entitled to carry on a sep-
arate business of the same nature as that of the firm. If he
does engage in a business which competes with the firm, he
must account to his copartners for the profits derived there-
from.28 Thus, a partner in a firm constituted for the pur-
derived by a partner from the use of information for purposes which
are wholly without the scope of the firm's business, nor does the lan-
guage of Lord Justice Cotton in Dean v. Macdowell, 8 Ch. Div. 345,
warrant any such notion. By 'information which the partnership
is entitled to' is meant information which can be used for the pur-
poses of the partnership. It is not the source of the information,
but the use to which it is applied, which is important in such mat-
ters. To hold that a partner can never derive any personal benefit
from information which he obtains as a partner would be mani-
festly absurd. Suppose a partner to become, in the course of carry-
ing on his business, well acquainted with a particular branch of
science or trade, and suppose him to write and publish a book on
the subject, could the firm claim the profits thereby obtained? Ob-
viously not, unless, by publishing the book, he in fact competed with
the firm in their own line of business." Aas v. Benham [1891], 2
Ch. 255, 65 Law Times (N. S.) 25, 19 Eng. Cas. 589.

ssLockwood v. Beckwith, 6 Mich. 168; Todd v. Rafferty's Adm'rs,
30 N. J. Eq. 254; Long v. Majestre, 1 Johns. Ch. (N. Y.) 305; Bast's
Appeal, 70 Pa. 301; McMahon v. McClernan, 10 W. Va. 419; Fletcher
v. Ingram, 46 Wis. 191, 204, 50 N. W. 424; Latta v. Kilbourn, 150
U. S. 524, Burdick's Cases, 503, Mechem's Cases, 212: Marshall v.
Johnson, 33 Ga. 500; Aas v. Benham [1891], 2 Ch. 255. Compare
Pierce v. Daniels, 25 Vt. 624. A partner may be enjoined from en-
gaging in a competing business. Marshall v. Johnson, 33 Ga. 500.

15 S RIGHTS OF PARTNERS.

pose of locating and developing mining properties must ac-
count to the firm for all mines located and sold by him dur-
ing the partnership.29 This rule is a necessary consequence
of the principle which prohibits a partner from making gains
at the expense of his copartners.

Noncompeting Business.

In the absence of an express contract to the contrary, a part-
ner may carry on business outside of the scope of the firm
business in a manner consistent with his duties as a partner.30
Even where he has agreed not to carry on any separate busi-
ness, he need not account to his partners for the profits of a
separate business carried on in violation of the aggreement
unless the business is a competing one, or falls within the
scope of the firm business,31 though, of course, the other part-
ners would have a remedy by injunction or damages on the
contract.

29 Jennings v. Rickard, 10 Colo. 395.

30 wheeler v. Sage, 1 Wall. (U. S.) 518; Belcher v. Whittemore,
134 Mass. 330, Burdick's Cases, 515.

3i Dean v. Macdowell, 8 Ch. Div. 345; Aas v. Benham [1891], 2
Ch. 244, 19 Eng. Rul. Cas. 589; Latta v. Kilbourn, 150 U. S. 524, Bur-
dick's Cases, 503, Mechem's Cases, 212; Metcalfe v. Bradshaw, 145
111. 124, 33 N. E. 1116. One of a firm of attorneys is entitled to re-
tain for himself the compensation he receives for acting as exec-
utor of an estate. Metcalfe v. Bradshaw, 145 111. 124, 33 N. E. 1116.
"Although a partner carries on a business, for his private benefit,
which is similar to that of the firm, he will not be answerable to
his copartners for the profits if the business is really different from
that of the firm. For example, a member of a firm of warehouse-
men does not compete with his partnership in owning and man-
aging wharf-boats (citing Northrup v. Phillips, 99 111. 449). Nor
does a partner in a firm of real estate brokers interfere with its
business by engaging in the purchase and sale of real estate as an
individual speculation [citing Latta v. Kilbourn, 150 U. S. 524, Bur-
dick's Cases, 503, Mechem's Cases, 212.] The case last cited shows
that the question of fact whether a partner is carrying on a busi-
ness in competition with his firm may be a difficult one, — one upon

CONTRIBUTION AND INDEMNITY. 159

Right to Contribution and Indemnity.

89. Every partner is entitled to be indemnified in account
with the firm for payments and liabilities incurred by.
him —

(a) In the ordinary and proper conduct of the business of

the firm.

(b) In or about anything done for the preservation of the

business or property of the firm.32

In General.

Every member of an ordinary firm is to a certain extent
both a principal and an agent.33 He is liable, as a principal,
to the debts and engagements of the firm, and in respect to
them he is entitled to contribution from his copartners, for
they are joint principals with him, and have no right to throw
on him alone the burden of obligations which are theirs as
much as his.34 So, each member, as an agent of the firm, is
entitled to be indemnified by the firm against losses and ex-
penses bona fide incurred by him for the benefit of the firm

which different courts will entertain contradictory opinions, but that
the rule of law applicable, when the facts have been determined, is
clear and simple." Burdick, Partn. 310, 311.

In Burr v. De La Vergne, 102 N. Y. 415, 7 N. E. 366, it was held
that inventions made by a partner, although relating to improve-
ments of machinery owned by the firm, are his separate property,
unless the making of such inventions is within the scope of the
partnership business, or there is an agreement that they shall be-
long to the firm.

32 The above black-letter text is taken from Pollock, Partn., art. 33.
It has been expressly enacted in terms by the English partnership
act (§ 24). The body of the text of this section is largely a con-
densation from Lindl. Partn. p. 367 et seq.

33 See ante, c. 1, "Agency as a Test of Partnership." See, also,
post, c. 9, "Rights and Liabilities as to Third Persons."

3* Lindl. Partn. p. 367; Downs v. Jackson, 33 111. 464; Lyons v.
Murray, 95 Mo. 23, 8 S. W. 170; Forbes v. Webster, 2 Vt. 58.

1(J0 RIGHTS OF PARTNERS.

while pursuing the authority conferred upon him by the
agreement entered into be! ween himself and his copartners.35
But a partner has no righl to charge the firm with losses or
expenses caused by his own negligence or want of skill, or in
disregard of the authority reposed in him,36 and of course the
righl to contribution or indemnity may be excluded by agree-
ment,37 or by fraud in inducing one to become a partner,33
A purchaser of a partner's share cannot be compelled to make
contribution, though, so far as the firm property yvill go, it
may be withheld from him, as be purchases subject to all the
firm debts; but if it has been paid oyer to him, it cannot be
recovered hack, because it is a voluntary payment.39

A partner may charge the firm with money expended by
him for the preservation or continuance of the partnership
concern.40

35 Wheeler v. Arnold, 30 Mich. 304; Christian & Craft Grocery Co.
v. Hill, 122 Ala. 490, 26 So. 149; Lyons v. Lyons, 207 Pa. 7, 56 Atl. 54.

••«; McFadden v. Leeka, 48 Ohio St. 513, 28 N. E. 874; Thomas v.
Atherton, 10 Ch. Div. 186; Cragg v. Ford, 1 Younge & C. Ch. 280.

37Lindl. Partn. p. 369; Gillan v. Morrison, 1 De Gex & S. 421; In
re Worcester Corn Exchange Co., 3 De Gex, M. & G. 180; McFadden
v. Leeka, 48 Ohio St. 513, 28 N. E. 874, Mechem's Cases, 232.

ssNewbigging v. Adam, 34 Ch. Div. 582.

30 Clayton v. Davett (N. J. Eq.), 38 Atl. 308, Burdick's Cases, 521.

40 Matthews v. Adams, 84 Md. 143, 35 Atl. 60; Ex parte Chippen-
dale, 4 De Gex, M. & G. 42, wherein Turner, J., placed this rule upon
the ground of implied authority. But Pollock (Dig. Partn. art. 33)
says: "This duty, imposed on the firm to indemnify any one of its
members against extraordinary outlays for necessary purposes, is
one of a class of duties quasi ex contractu, which are recognized by
the law of England only very sparingly, and under special circum-
stances. It is outside the rules of agency, and has still less to do
with trust. Real analogies are to be found in salvage and average."
The weight of opinion follows the opinion of Turner, J., supra,
rather than that of Pollock. See Wright v. Hunter, 5 Ves. 793;
Sells v. Hubbell's Adm'rs, 2 Johns. Ch. (N. Y.) 397; Meserve v. An-
drews, 106 Mass. 419; Lee's Ex'x v. Dolan's Adm'x, 39 N. J. Eq. 193;
Bates v. Lane, 62 Mich. 132, 28 N. W. 753.

CONTRIBUTION AND INDEMNITY. 161

Limit as to Amount of Contribution.

The total amount recoverable is not necessarily limited by
the nominal capital of the partnership for losses and expenses
may and often do exceed the capital.41 Neither is the amount
which a partner may be called on to contribute necessarily
limited to a sum proportionate to his share in the partnership
for if some of the partners are unable to contribute their
share, the solvent partners must contribute the whole
amount.42 The limit of contribution may be fixed by express
agreement between the members of a firm, and in that case
no partner can call upon the others to exceed the amount
fixed, however great may have been the amount of his own
outlay upon behalf of the firm.43 And on the same principle
one who is by the agreement bound to contribute labor as his
share of the capital, cannot be compelled to contribute to losses
of capital by the other partner.433-

Contribution in Illegal Transactions.

It is a general principle in the law of torts that there is no
contribution between wrong-doers; but this doctrine, as ap-
plied to partners, is subject to considerable modification.
"The claim of a partner to contribution from his copartners
in respect of a partnership transaction cannot be defeated on
the ground of illegality, unless the partnership is itself an il-
legal partnership, or unless the act relied on as the basis of
the claim is not only illegal, but has been commmitted by the
partner seeking contribution, when he knew or ought to have
known of its illegality.44 In any of these cases, he can ob-

« Ex parte Chippendale, 4 Dex, M. & G. 36, 42.
•»2 McKewan's Case, 6 Ch. Div. 447.

« Scudder v. Ames, 89 Mo. 496, 14 S. W. 525; In re Worcester
Corn Exchange Co., 3 De Gex, M. & G. 180.

"a Meadows v. Moquot, 22 Ky. L. R. 1646, 61 S. W. 28.
•iiAdamson v. Jarvis, 4 Bing. 66; Betts v. Gibbins, 2 Adol. & E.
11

162 RIGHTS OF PARTNERS.

tain imt assistance against his copartners, and must abide the
consequences of his own willful breach of the Law.48 Bu1 it'
the partnership is nol of Itself illegal, and if the partner,
claiming .contribution lias not himself been personally guilty,

his claim will prevail, although the loss in respect of which
it is made may have arisen from an unlawful act."40

How and When Enforced.

The right to contribution and indemnity cannot be en-
forced until the partnership ha- been dissolved, and its ac-
counts sen led. As will be seen in a subsequent chapter, it is
a general rule that an action at law cannot be maintained by
one partner against his copartners in respect to a partnership
tran-action, and that the only remedy between partners is a
suit in equity for a dissolution of the firm, and a settlement
of it< affairs, in which suit all the rights and liabilities of the
partners between themselves will be adjusted.47

Right to Compensation.

qo. A partner is not entitled to compensation for services
in the transaction of firm business, except —
Exception —

(a) Where there is an agreement to pay it, and

(b) Where extra trouble has been caused by a copartner's
willful neglect of his duties.

57; Thomas v. Atherton, 10 Ch. Div. 185. Compare Boggess v. Lilly.
18 Tex. 200.

46 Smith v. Ayrault, 71 Mich. 475, 39 N. W. 724; Aubert v. Maze,
2 Bos. & P. 371; Clayton v. Davett (N. J. Eq.), 38 Atl. 308, Burdick's
Cases, 521.

*<•• Lindl. Partn. p. 378. See, also, Campbell, 7 CI. & F. 166; Hor-
bach's Adm'rs v. Elder, 18 Pa. 33; Clayton v. Davett (N. J. Eq.), 38
Atl. 308, Burdick's Cases, 521.

*' See post, c. 10, "Actions." See, also, generally, Lawrence v.
Clark, 9 Dana (Ky.) 257; Kennedy v. McFadon, 3 Har. & J. (Md.)
194; Eddins v. Menefee (Tenn. Ch.), 54 S. W. 992.

>

RIGHT TO COMPENSATION. 163

Tt is the duty of partners to devote their time to carrying
on the firm business, and, in the absence of special agreement,
they are not entitled to extra compensation therefor, but must
be content with their share of the profits.48 The mere fact
that one partner is more active in the firm business, or per-
forms greater or more valuable services than his copartner,
will not entitle him to extra compensation.49 A managing
partner is not entitled to salary, in the absence of any agree-
ment to pay it.50 The rule that a partner is not entitled to
compensation for his services applies to services by surviving
partners in winding up the business and disposing of part-
nership assets,51 and to extra services caused by the sickness
of a partner, as this is a risk incidental to the partnership re-
lation, and therefore assumed.52

48 Lewis v. Moffett, 11 111. 392; Burgess v. Badger, 124 111. 288, 14
N. E. 850; O'Brien v. Hanley, 86 111. 278; Ligare v. Peacock, 109 111.
94; Askew v. Springer, 111 111. 662; Chamberlain v. Sawyers, 17 Ky.
L. R. 716, 32 S. W. 475; Major v. Todd, 84. Mich. 85, 47 N. W. 841;
Godfrey v. White, 43 Mich. 171, 5 N. W. 243; Eckert v. Clark, 14
Misc. 18, 35 N. Y. Supp. 118; Nicoll v. Town of Huntington, 1 Johns.
Ch. (N. Y.) 166; Bradford v. Kimberly, 3 Johns. Ch. (N. Y.) 431;
Paine v. Thacher, 25 Wend. (N. Y.) 450; Lyon v. Snyder, 61 Barb.
(N. Y.) 172; Redfield v. Gleason, 61 Vt. 220, 17 Atl. 1075; Taylor v.
Dorr, 43 W. Va. 351; Lamb v. Wilson, 3 Neb. (Unoff.) 496, 92 N. W.
167.

•»'->King v. Hamilton, 16 111. 190; Lewis v. Moffett, 11 111. 392;
Roach v. Perry, 16 111. 37; Burgess v. Badger, 124 111. 288, 14 N. E.
850; Brownell v. Steere, 29 111. App. 358; Heckard v. Pay, 57 111.
App. 20; Heath v. Waters, 40 Mich. 457; Beatty v. Wray, 19 Pa. 516;
Drew v. Ferson, 22 Wis. 651.

so Evans v. Warner, 2 App. Div. (N. Y.) 230; Smith v. Brown, 44
W. Va. 342, 30 S. E. 160.

™ Kimball v. Lincoln, 5 111. App. 316; Barry v. Jones, 11 Heisk.
(Tenn.) 206. 27 Am. Rep. 742; Denver v. Roane, 99 U. S. 355.
Under special circumstances, a surviving partner may be entitled to
extra compensation for services. Zell's Appeal, 126 Pa. 329, 17 Atl.
647; Robinson v. Simmons, 146 Mass. 167, 15 N. E. 558. See, also,
' Thayer v. Badger, 171 Mass. 279, 50 N. E. 541.

«a Heath v. Waters, 40 Mich. 457.

164 • RIGHTS OF PARTNERS.

Where, however, there is a contract for compensation,
either express <»r implied from the course of the business be-
tween the partners, or from the duties and obligations im-
posed by the articles, it may be recovered.53

A partner may recover compensation for extra trouble and
services thrown upon him by a copartner who has willfully
neglected his duties as a partner.8 '

Right to Interest on Balances.

91. Interest should be allowed on balances in a partnership
accounting whenever there is an express or implied
contract to pay it.

92. In the absence of an agreement to pay interest, it should
not be allowed or charged upon capital paid in, ad-
vances, overdrafts, or undivided profits, but it should
be charged on unpaid subscriptions to capital.

The confusion and conflict among the authorities upon the
allowance of interest in partnership accountings is so great
that one eminent writer upon this subject has said that the

53 Lewis v. Moffett, 11 111. 392; Keiley v. Turner, 81 Md. 269, 31
Atl. 700; Caldwell v. Leiber, 7 Paige, Ch. N. Y. 488; Emerson v.
Durand, 64 Wis. Ill, 24 N. W. 129. A promise to pay for extra
services will not be implied from the mere rendition of such serv-
ices, McAllister v. Payne, 108 Ga. 517, 34 S. E. 165; no matter how
great the excess of services may be, Lewis v. Moffett, 11 111. 392;
Roach v. Perry, 16 111. 37, and Burgess v. Badger, 124 111. 288, 14
N. E. 850.

54 Denver v. Roane, 99 U. S. 355; Marsh's Appeal, 69 Pa. 30; Airey
v. Borham, 29 Beav. 620. Where a partnership contract provided
that each member was to render services, and it appeared, on a
settlement, that one partner had furnished all the capital, and had
exercised complete management and control over the firm affairs,
it was proper to allow him credit for his services. Mattingly v.
Stone's Adm'r, 18 Ky. L. R. 187, 35 S. W. 921, Burdick's Cases, 516.

INTEREST ON BALANCES. 165

authorities did not justify the deduction from them of any
general principle upon this important subject;55 and it has
very frequently been said that each case must be determined
upon its own circumstances, and cannot be governed by any
fixed rules.56 So far as a. statement of the circumstances un-
der which an agreement to pay interest will be implied, this
is probably correct, for the existence of such an agreement is
a question of fact, and the circumstances tending to prove a
fact may be almost infinite in variety. But in cases not gov-
erned by agreement, the courts must apply some rule, and out
of the conflicting rules adopted by different courts, those
stated above in the black-letter text are selected as being in
consonance with sound principle. These rules rest upon the
principle that interest can be properly allowed in only two
classes of cases : First, where there is a contract, express or
implied, to pay it, in which case it is recoverable because it
is a debt ; and, second, where there has been a wrongful delay
in the payment of money, interest may be allowed as damages
for the delay.57

Agreement Express or Implied.

Wherever there is an agreement, either express or implied,
to pay interest upon capital paid or unpaid, or upon advances,
or undivided profits, it should be allowed or charged in stat-
ing the partnership accounts.58 The obvious reason is that a

65 Lindl. Partn. p. 389.

66 Johnson v. Hartshorne, 52 N. Y. 173; Gyger's Appeal, 62 Pa. 79,
Burdick's Cases, 586; Kelley v. Shay, 206 Pa. 215, 55 Atl. 927;
Buckingham v. Ludlum, 29 N. J. Eq. 350.

57 Kelley v. Shay, 206 Pa. 215, 55 Atl. 928. See, also, Hale, Dam-
ages, p. 144, wherein the principles upon which interest is awarded
are examined.

esTaft v. Schwamb, 80 111. 289, Burdick's Cases, 577; Keiley v.
Turner, 81 Md. 269, 31 Atl. 700; Payne v. Freer, 91 N. Y. 43; Wells
v. Babcock, 56 Mich. 276, 22 N. W. 809, 27 N. W. 575; Emerson v.
Durand, 64 Wis. Ill, 24 N. W. 129; Prentice v. Elliott, 72 Ga. 154.

166 RIGHTS OF PARTNERS.

contracl to pay interesl creates a debt, which is, of course, a
proper item of debil <>r credit. Mercantile usages and the
course of trade dealings authorize a demand for interest in
cases where ii would not otherwise be payable. Accordingly,
attention musl be paid no1 only to any express agreement, bu1
also to tlif practice of each particular firm, ;in<l to the custom
of the trade it carries on.69

Interest in Absence of Agreement — Capital.

Partners are not entitled to interest upon their respective
contributions to capital which have been actually paid, in the
absence of an express contract. The cases are generally
agreed upon this point.60 Even if one partner has brought in
his stipulated capital, and the other has not, the former is not
entitled to interest on his contribution in the final account-
ing,6} though some cases take a contrary view, and allow in-
teresl in such a case.02 It would seem to he more logical to
charge the delinquent partner with interest upon the amount
he ought to have brougbl in, but did not, than to allow the
other partner interest upon the amount brought in by him in
consideration of a share in the profits. The results in the
two cases would be very different where the agreed contribu-

Where interest on capital is payable, interest stops at the date of
dissolution, unless otherwise agreed. Johnson v. Hartshorne, 52
N. Y. 173; Bradley v. Brigham, 137 Mass. 545; Barfield v. Loughbor-
ough, L. R. 8 Ch. 1.

•"■•■' Lindl. Partn. p. 389; Ex parte Chippendale, 4 De Gex, M. & Q.
36. See, also, Winchester v. Glazier, 152 Mass. 316, 25 N. E. 728;
Lockwood v. Roberts, 171 Mass. 109, 50 N. E. 517.

eo Moss v. McCall, 75 111. 190; Whitcomb v. Converse, 119 Mass. 38,
Burdick's Cases, 575, Mechem's Cases, 492; Brown's Appeal, 89 Pa.
139.

63 Lindl. Partn. p. 390; Hill v. King, 3 De Gex, J. & S. 418; Stokes
v. Hodges, 11 Rich. Eq. (S. C.) 135; Clark v. Worden, 10 Neb. 87,
4 N. W. 413.

1 ■■-• Hartman v. Woehr, 18 N. J. Eq. 383; Ligare v. Peacock, 109 111.
04; Montague v. Hayes, 10 Gray (Mass.) 609.

INTEREST ON BALANCES. 167

tions were unequal. So, if one partner contributed all the
capital, and the other merely his time and services, the for-
mer cannot claim interest on his capital.63

The reason why interest should not be allowed on capital
is that, in the absence of an express contract to pay it, the
reasonable construction of the partnership contract is that the
capital or services of the several partners are to be compen-
sated by the stipulated share of the profits, and there is no
room for an implied agreement to pay interest. An express
contract to pay interest on capital may be implied where the
partners themselves have been in the habit of charging in-
terest in their accounts.64

Where a partner has agreed to pay in a certain amount of
capital, and has failed to do so, it is proper to charge him
with interest on the amount, such interest being imposed as
damages for the nonpayment at the time it was due.65

Same— Advances, Overdrafts, and Undivided Profits.

Interest should not be allowed or charged upon advances,
overdrafts, or undivided profits, in the absence of a special
agreement to that effect.06 Such transactions constitute
merely items in the partnership accounts, and until the ac-

88 Rodgers v. Clement, 15 App. Div. 561, 44 N. Y. Supp. 516; Jack-
son v. Johnson, 11 Hun (N. Y.) 509; Tutt v. Land, 50 Ga. 339; Day
v. Lockwood, 24 Conn. 185. Interest is not recoverable on an excess
of capital contributed to a partnership by one partner, on the ground
that he devoted his time and money to carrying on the partnership
business, whereas the other partner contributed nothing in the way
of time or labor. Thompson v. Noble, 108 Mich. 19, 65 N. W. 563.

8* Cooke v. Benbow, 3 De Gex, J. & S. 1; Millar v. Craig, 6 Beav.
433. See, also, Winchester v. Glazier, 152 Mass. 316, 25 N. E. 728.
But compare In re James, 146 N. Y. 78, 40 N. E. 876.

8B Ligare v. Peacock, 109 111. 94; Hartman v. Woehr, 18 N. J. Eq.
383.

88 Seibert's Assignee v. Ragsdale, 19 Ky. L. R. 1869, 44 S. W. 653;
Prentice v. Elliott, 72 Ga. 154; Clark v. Worden, 10 Neb. 87, 4 N. W.
413; Gilman v. Vaughan, 44 Wis. 646; Gage v. Parmelee, 87 111. 329;

16S RIGHTS OF PARTNERS.

counts are settled, and a balance struck, there is no duty to
pay over the money, and there tore a charge of interest as dam-
ages cannot he justified.07 Nevertheless, some authorities
take a differenl view, and hold that interest should be al-
lowed <ui advances and charged on overdrafts, even in the ab-
sence of a special contract to pay it; the transaction being
considered in the nature of 'a loan, where an agreement to
pay interest is implied.68

i
Partnership Accounts.

93. Every partner is entitled to have proper accounts kept,
and to inspect them at all reasonable times.

Lindley says that it is one of the clearest rights of a part-
ner to have accurate accounts kept of all the firm transactions,
and to have free access to them at all reasonable times,00 and

Sweeney v. Neely, 53 Mich. 421, 19 N. W. 127; Ashbrook v. Ashbrook,
16 Ky. L. R. 593, 28 S. W. 660.

ciSeibert's Assignee v. Ragsdale, 19 Ky. L. R. 1869, 44 S. W.
653; Prentice v. Elliott, 72 Ga. 154; Miller v. Lord, 11 Pick.
(Mass.) 11.

esKeiley v. Turner, 81 Md. 269, 31 Atl. 700; Matthews v. Adams,
84 Md. 143, 35 Atl. 60; Folsom v. Marlette, 23 Nev. 459, 49 Pac. 39,
Burdick's Cases, 570; Coldren v. Clark, 93 Iowa, 352, 61 N. W. 1045;
Lloyd v. Carrier, 2 Lans. (N. Y.) 364. Where a partner had mis-
appropriated firm property to his own use, he was held properly
chargeable with interest on its value from the date of appropria-
tion. Folsom v. Marlette, 23 Nev. 459, 49 Pac. 39, Burdick's Cases,
570.

e»Lindl. Partn. p. 404. See, also, Godfrey v. White, 43 Mich. 171;
Hall v. Clagett, 48 Md. 223; Webb v. Fordyce, 55 Iowa, 11, 1 N. W.
385, Mechem's Cases, 228; Dimond v. Henderson, 47 Wis. 172, 21
N. W. 73; Hughes v. Ewing, 162 Mo. 261, 62 S. W. 465; Rowe v.
Wood, 2 Jac. & W. 558; Greatrex v. Greatrex, 1 De Gex & S. 692.
Of course a partner has no right to inspect and make copies from
the books for an improper purpose. Trego v. Hunt [1896], App. Cas.
7, Burdick's Cases, 602, Mechem's Cases, 199.

PARTNERSHIP ARTICLES. 169

this right of inspection has been extended to one induced by
fraud to retire from the firm on the ground that there never
had been a real termination of his rights as a partner.693.
And it is each partner's duty to give the actual bookkeeper all
information necessary to enable him to keep proper books.
If no books of account are kept, or if they are kept in such a
manner as to be unintelligible, or if they are destroyed or
wrongfully withheld, and an accounting is directed by the
court, every presumption will be made against those to whose
negligence or misconduct the nonproduction of proper ac-
counts is due,70 but a partner's account should not be charged
for losses that may have resulted from an unscientific system
of bookkeeping, without any showing of wrong motive.703.
In the absence of any different agreement, the books should
be kept at the principal place of business of the partnership.71
One partner has no right to keep the books in his own exclu-
sive custody, or to remove them from the place of business of
the firm.72

Duty to Conform to Partnership Articles.

94. It is the duty of partners to conform in all respects to
the partnership agreement, and to confine their acts
within the scope of the partnership business.

This duty is too obvious to require extended comment.
Contracts are made to be kept, not broken. If the partners

00a Cohn v. Hessel, 95 App. Div. 548, 88 N. Y. Supp. 1057.
ToLindl. Partn. p. 405. See, also, Gage v. Parmelee, 87 111. 329;
Pierce v. Scott, 37 Ark. 308.

™a Knipe v. Livingston, 209 Pa. 49, 57 Atl. 1130.

n Pollock, Partn. art. 39.

« Taylor v. Davis, 3 Beav. 388, note.

i;,) RIGHTS OF PARTNERS.

sustain a Loss by reason of their copartner's default in this
regard, he must indemnify them.73

Duty to Exercise Care and Skill.

95. A .partner is liable_ tgJ? js ^rnjQartner_for_any failure to
exercise reasonable care and skill in. the conduct of the
partnership business.

Partners as agents for their firm in the conduct of its busi-
ness must exercise reasonable cure and skill, and are liable
for any loss or damage caused by their failure to do so.'4
But a partner is not solely Liable for losses caused by a lack
of discretion or good judgment not amounting to negligence
or bad faith, bui the loss falls upon all the partners as a
firm.7"' A partner is not entitled to damages from a copart-
ner for mere neglect of the interests of the firm, without any

78 Murphy v. Crafts, 13 La. Ann. 519, Mechem's Cases, 227; Marsh's
Appeal, 69 Pa. 30; Campbell v. Campbell, 7 Clark & F. 166. The sale
by a partner of his interest in the firm proves his right of action for
breach of the articles. Gwens v. Berry, 21 Ky. L. R. 680, 52 S. W.
942.

T-tYetzer v. Applegate, 83 Iowa, 726, 50 N. W. 66; Morris v. Wood
(Tenn. Ch.) 35 S. W. 1013, Burdick's Cases, 531.

"Charlton v. Sloan, 76 Iowa, 288, 41 N. W. 303; Morrison v.
Smith, 81 111. 221; Fordyce v. Shriver, 115 111. 530; Knipe v. Liv-
ingston, 209 Pa. 49, 57 Atl. 130. And see § 89, ante. A partner in a
banking business, to whom is left the active management of the
business, is not liable for honest errors in judgment, nor for the
failure to take the utmost precaution possible, in making invest-
ments for the bank. Exchange Bank of Leon v. Gardner, 104 Iowa,
176, 73 N. W. 591. A duplicate payment of a bill, made by mistake
in the regular course of business by one partner, cannot be charged
to him on an accounting unless he was grossly negligent. Tygart
v. Wilson, 39 App. Div. 58, 56 N. Y. Supp. 827. Losses by injury to
the stock in trade or the partnership assets must be borne by the
firm. Savery v. Thurston, 4 111. App. 55.

POWER OF MAJORITY. 171

fraudulent misconduct or willful and positive refusal to per-
form duties devolving upon him as a partner.76

Power of Majority.

96. The powers of a majority of the partners may be regu-
lated by agreement.

97. In the absence of special agreement, the decision of the_
majority^j£jpontrolling in all matters arising in the
ordinary course of the partnership business, provided —

Proviso — The majority must act in good faith.

98. In the absence of special agreement, a majority cannot
bind dissenting partners by a change in the nature of
theTbusiness, or the terms of association.

Express Agreements.

To avoid disputes, the articles of partnership ought to ex-
pressly provide how far the decision of a majority of the part-
ners is to be binding upon them all. Whatever provision is
agreed to is, of course, binding upon all.

In Absence of Agreement.

In the absence of any express agreement upon the subject,
the law fixes the powers of the majority. Whether or not
the will of the majority shall prevail in any given matter de-
pends upon the nature of the question at issue, for there is
an important distinction between differences which relate to
matters incidental to carrying on the Legitimate business of
a partnership, and differences which relate to matters with
which it was never intended that the partnership should con-
cern itself.77

t« Brownell v. Steere, 29 111. App. 358, affirmed 128 111. 209, 21
N. E. 3.

" Lindl. Partn. p. 314.

172 RIGHTS OF PARTNERS.

Same — Mailers Willi in Scope of Partnership Business.

Whenever a partnership is formed by more than two per-
BonSj in the absence of any express provisions to the contrary,
there is always an implied understanding thai the acts of the
majority are to prevail over those of the minority as to all
matters within the scope of the common business.78 But even
in these matters, the decision of the majority will not pre-
vail unless they have acted in good faith for the benefit of the
firm, and not for their own private benefit.79 The minority
should ordinarily have notice of the proposed action, and an
opportunity to present their objections.80

Where the partners are equally divided as to any proposed
action, those who iorbid a change will prevail."

rrw i i ...Li »■■ ■ « ■! im '" ii r r • ■ ■ *' " ' ' "

Same — Change in Business or Terms of Association.

When the proposed action relates to matters with which it
was never intended that the firm should concern itself, it is

78 Johnston v. Dutton's Adm'r, 27 Ala. 245, Mechem's Cases, 304;
Western Stage Co. v. Walker, 2 Iowa, 504; Peacock v. Cummings,
46 Pa. 434; Faulds v. Yates, 57 111. 416; Waterbury v. Merchants'
Union Exp. Co., 50 Barb. (N. Y.) 157; Latta v. Kilbourn, 150 U. S.
545, Burdick's Cases, 503, Mechem's Cases, 212.

to Johnston v. Dutton's Adm'r, 27 Ala. 245, Mechem's Cases, 304;
Western Stage Co. v. Walker, 2 Iowa, 513, 65 Am. Dec. 789; Const
v. Harris, Turn. & R. 525; Blisset v. Daniel, 10 Hare, 493.

so Western Stage Co. v. Walker, 2 Iowa, 513, 65 Am. Dec. 789;
Johnston v. Dutton's Adm'r, 27 Ala. 245, Mechem's Cases, 304; Story,
Partn. § 123.

siLindl. Partn. p. 314; Johnston v. Dutton's Adm'r, 27 Ala. 245,
Mechem's Cases, 304. It is upon this principle that one partner can-
not either engage a new or discharge an old servant, against the
will of his copartner. Donaldson v. Williams, 1 Cromp. & M. 345.
Nor, if the lease of the partnership place of business expires, insist
on renewing the lease, and continuing the business at the old place.
Clements v. Norris, 8 Ch. Div. 129.

"The majority of the members of a partnership may, in case of
diversity of opinion, manage the business as they see fit, acting in
good faith, and within the powers necessary to the management,

w

DIVISION OF PROFITS. 173

well settled that no majority, however large, can lawfully en-
gage the firm in such matters against the will of even one dis-
senting partner. Thus, the majority can not alter the prin-
ciple upon which profits are to be dealt with,82 or engage the
linn in a different business,83 or, generally, make any change
in matters provided for by the articles of partnership.84
Even a provision in the articles of partnership that the ma-
jority should govern is construed not to authorize radical
changes of the character under consideration.85

Division of Profits.

gg. In the absence of any special contract on the subject,
the majority may determine the time when profits
shall be divided, and the amount to be divided.

ioo. For the purpose of periodic division, the excess of ordi-
nary current receipts over ordinary current expenses
may be treated as profits.

The mode of ascertaining profits, the times at which profits
are to be divided, and the amount to be divided at any one
time, ought to be, and usually are, fixed by the partnership
agreement; but in the absence of any express or implied
agreement upon the subject, the matter may be determined by

and not withheld by the articles of partnership, without being lia-
ble for losses which could not be foreseen." Markle v. Wilbur, 200
Pa. 457, 50 Atl. 204. See, also, Kirk v. Hodgson, 3 Johns. Ch. 400.

82 Const v. Harris, Turn. & R. 496.

83 Zabriskie v. Hackensack & N. Y. R. Co., 18 N. J. Eq. 178. In
Natusch v. Irving, 2 Coop. Ch. 358, Gow, Partn. 398, Lindl. Partn.
p. 316, it was held that the majority stockholders in a joint-stock
fire and life insurance company could not change it into a marine
insurance company.

s-t Livingston v. Lynch, 4 Johns. Ch. (N. Y.) 573. No change in
membership can be so made. See ante, § "Delectus Personarum."
85 Livingston v. Lynch, 4 Johns. Ch. (N. Y.) 373.

174: RIGHTS OF PARTNERS.

:, majority of the partners.86 "Profit is_lhe_cxcess of re-
ceipts over expenses, and in winding up a partnership, noth-
ing is properly divisible as profit which does not answer this
description. But for the purposes of business, and of facil-
itating annual divisions of profits, a distinction is made be-
tween ordinary and extraordinary receipts and expenses; and
whilsl all extraordinary expenses are frequently defrayed
..nt of capital, and out of money raised by borrowing, the or-
dinary expenses are defrayed out of the returns of the busi-
ness, and the profits divisible in any one year are ascertained
by comparing the ordinary receipts with the ordinary expen-
sea of that year."47 What losses and expenses ought to be
treated as ordinary, and therefore payable out of the current
receipts, and what ought to be treated as extraordinary, and
payable legitimately out of the capital or money raised by
borrowing, is, in the absence of special agreement, a matter to
be determined by the majority.88

Expulsion of Paetnee.

ioi. No majority of the partners can expel any partner un-
less a power to do so has been conferred by express
agreement between the partners.

Where a power of expulsion is conferred, it can only he ex-
ercised in good faith, with a view to the benefit of the firm,
and not for the private benefit of any of the partners,89 and

so Lindl. Partn. p. 393. See, also, Kennedy v. Kennedy, 3 Dana
(Ky.) 239; Wood v. Beath, 23 Wis. 254.

87 Lindl. Partn. p. 394.

as Lindl. Partn. p. 394.
■ Blisset v. Daniel, 10 Hare, 493, 19 Eng. Rul. Cas. 516. The
power cannot be exercised merely to enable the continuing partners
to appropriate to themselves the share of the expelled partner at a
fixed value, less than the true value. Blisset v. Daniel, 10 Hare,
493, 19 Eng. Rul. Cas. 517.

EXPULSION OF PARTNER. 1 75

the partner whom it is sought to expel must have notice and
an opportunity of being heard.90 If the expulsion is made
in good faith in pursuance of an express power, no reason
therefor need he assigned ;91 but if cause be not shown, then it
must be very clearly made out that the exercise of the power
has been in good faith.92 A power of expulsion will be con-
strued with very great strictness.93 An attempted expulsion
in violation of these rules is simply void, and the excluded
partner's remedy is to claim reinstatement in his rights as a
partner, and not an action for damages.94 y V"

90 Wood v. Woad, L. R. 9 Exch. 190. The power was not properly
exercised at the exclusive instance of one partner, and, in conse-
quence of his representation to the other partners, made without
the knowledge and behind the back of the partner who was to be
expelled, and without giving to such partner the opportunity of
stating his case, and of removing any misunderstanding on the part
of his copartners. Blisset v. Daniel, 10 Hare, 493, 19 Eng. Rul. Cas.
517.

9i Russell v. Russell, 14 Ch. Div. 471, 49 L. J. Ch. 268, 42 Law
Times (N. S.) 112; Stuart v. Gladstone, 38 Law Times (N. S.) 557;
Blisset v. Daniel, 10 Hare, 539, 19 Eng. Rul. Cas. 546. Where a part-
ner can be expelled only for cause, the burden of proof is on the
party asserting that a cause of forfeiture has arisen. Patterson v.
Silliman, 28 Pa. 304. Insolvency would be a sufficient ground for the
exercise of the power. Hubbard v. Guild, 1 Duer (N. Y.) 662.

92 Blisset v. Daniel, 10 Hare, 522, 19 Eng. Rul. Cas. 532.

93 Blisset v. Daniel, 10 Hare, 505, 19 Eng. Rul. Cas. 527.

9-* Wood v. Woad, L. R. Exch. 190. In Patterson v. Silliman, 28
Pa. 304, the partnership agreement provided that the party violating
its stipulations should forfeit his interest, and might be excluded,
at the option of the other partner, from further participation in the
business. The complainant, having been excluded, brought a bill
for dissolution, sale of the property, etc. The court held that on
the facts proved he was entitled to his prayer; that the burden of
proof was on the party asserting that a cause of forfeiture had
arisen, and that the respondent in the case at bar had failed to sus-
tain it. In Gorman v. Russell, 14 Cal. 531, it was held that a vol-
untary association for mutual relief in sickness and other similar
purposes, which was in effect a partnership, could be dissolved by

170 RIGHTS OF PARTNERS.

Partner's Lien.

102. Every partner has the right to have the partnej

property applied in payment of the debts and liabilities
of the firm.

103. Every partner has a right to have whatever may be
due to the firm from his copartners, as members there-
of, deducted from what would otherwise be payable
to them in the partnership.

On a dissolution, every partner is entitled as against the'
other partners and all persons claiming through them in res-
pect of their interests as partners, to have the property of the
partnership applied in payment of the debts and liabilities of
the firm, and to have the surplus assets, after such payment,
applied in payment of what may be due to the partners, re-
spectively, after deducting what may be due to the firm from
them as partners.95 This right is what is known as a "part-

a court of equity if it improperly excluded a member. See, also,
Berry v. Cross, 3 Sandf. Ch. (N. Y.) 1.

85 West v. Skip, 1 Ves. Sr. 239, 19 Eng. Rul. Cas. 618; Ex parte
Ruffin, 6 Ves. 119, Burdick's Cases, 192, 19 Eng. Rul. Cas. 618.
Among the many American cases recognizing the lien of partners on
partnership property are Donelson's Adm'rs v. Posey, 13 Ala. 752;
Duryea v. Burt, 28 Cal. 569; Allen v. Hawley, 6 Fla. 142; Pearson
v. Keedy, 6 B. Mon. (Ky.) 128; Crooker v. Crooker, 46 Me. 250 r
Freeman v. Stewart, 41 Miss. 138; Hill v. Beach, 12 N. J. Eq. 31 ;
Menagh v. Whitwell, 52 N. Y. 146, Burdick's Cases, 222; Lane v.
Jones, 9 Lea (Tenn.) 627; Case v. Beauregard, 99 U. S. 119, 124;
Mechem's Cases, 440; Standish v. Babcock, 52 N. J. Eq. 628, 29 Atl.
327; Rainey v. Nance, 54 111. 29; Hapgood v. Cornwell, 48 111. 64.
The lien attaches to partnership land, as well as personalty, regard-
less of the state of the legal title. Duryea v. Burt, 28 Cal. 569;
Crooker v. Crooker, 46 Me. 250; Lane v. Jones, 9 Lea (Tenn.) 627.
See, also, Roberts v. McCarty, 9 Ind. 16; Evans v. Hawley, 35 Iowa,
83; Divine v. Mitchum, 4 B. Mon. (Ky.) 488; Arnold v. Wainwright,
6 Minn. 358; DilWorth v. Mayfield, 36 Miss. 40; Priest v. Chouteau,

PARTNER'S LIEN.

ner's lien." Tt. existjg.dnrijpy the partnershi
become active until a dissolution, it until it is sought to as
certain the share of a partner. If _a_partnership is illegal,
no, lien exists.96 This right or lien is available against a
partner, or any one claiming, through him, a share in the
partnership assets.07 Thus, it is available against the ex-
ecutors of a deceased, or the trustee of a bankrupt partner,98
and the assignee of a partner's share." But it is not avail-
able against a purchaser from a partner of specific chattels
of the firm.100

The lien attaches to all the partnership assets at the time
of dissolution, or the ascertainment of a partner's share, and
to such assets only. 10 1

The lien of partners upon the surplus after the payment of
partnership debts extends to -whatever is due to or from the
firm by or to the members thereof, as such. It does not ex-
tend to debts incurred between the firm and its members
otherwise than in their character of members.102

JThc lien is lost by th^ pm1YPr«ipn n-f pMuPr^jp prpppvtv <Aa
into the separate property of q pqT+nor,108 and of course, jt is y^TS—W
lost as to property validly *"\A tn a st^M

85 Mo. 398; Hiscock v. Phelps, 49 N. Y. 97; Mendenhall v. Benbow,
84 N. C. 646; Digg's Adm'r v. Brown, 78 Va. 292.

oeEwing v. Osbaldiston, 2 Mylne & C. 88.

87 Hoyt v. Sprague, 103 U. S. 613; Hobbs v. McLean, 117 U. S. 567.

98 Croft v. Pyke, 3 P. Wms. 180.

s>9 Cavander v. Bulteel, L. R. 9 Ch. 79.

ioo in re Langmead's Estate, 7 De Gex, M. & G. 353.

ioi Payne v. Hornby, 25 Beav. 280; West v. Skip, 1 Ves. Sr. 239,
19 Eng. Rul. Cas. 618. A partner has no lien upon his copartner's
individual property for a debt arising on a partnership transaction.
Murphy v. Warren, 55 Neb. 215, 75 N. W. 573.

io2Lindl. Partn. p. 683; Ryall v. Rowles, 1 Ves. Sr. 348; Skipp v.
Harwood, 2 Swanst. 586, note. See, also, Uhler v. Semple, 20 N. J.
Eq. 288; Ketchem v. Durkee, Hoff. Ch. (N. Y.) 538.

103 Giddings v. Palmer, 107 Mass. 269; Robertson v. Baker, 11 Fla.
12

17S RIGHTS OF PARTNERS.

It is a necessary consequence of the existence of the part-
ner's lien, that no partner has a right to apply the partner-
ship property to his own individual uses or debts, and unless
the transferee is a bona fide holder for value, the property so
transferred may be recovered for the benefit of the firm.104
Another consequence of the existence of the partner's lien is
the priority of firm over separate creditors in the distribution
of the firm property. This aspect of the partner's lien will
be more fully treated in the following chapter.105

192; In re Langmead's Estate, 7 De Gex, M. & G. 353; Lingen v.
Simpson, 1 Sim. & S. 600; Ex parte Ruffin, 6 Ves. 119, Burdick's
Cases, 192, 19 Eng. Rule Cas. 618. Compare Holderness v. Shackels,
8 Barn. & C. 612. Where a partner buys the interest of a copartner,
he takes the property discharged of his copartner's right to have the
debts paid therefrom. Ladd v. Griswold, 4 Gilm. (111.) 25; Cory v.
Long, 2 Sweeny (N. Y.) 491. So, where a retiring partner sells his
interest to his copartner, and the latter assumes and agrees to pay
the debts, the lien on the assets is divested, and the personal obli-
gation of the partner is substituted therefor. Williamson v. Adams,
16 111. App. 564; Ladd v. Griswold, 4 Gilm. (111.) 25; Parker v. Mer-
ritt, 105 111. 293; Hapgood v. Cornwell, 48 111. 64; Goembel v. Arnett,
100 111. 34.

loiJanney v. Springer, 78 Iowa, 617, 43 N. W. 461; Davies v. At-
kinson, 124 111. 474, 16 N. E. 899; Farwell v. St. Paul Trust Co., 45
Minn. 495, 48 N. W. 326.

105 See post, § 127 et seq.

CHAPTER IX.

RIGHTS AND LIABILITIES OP PARTNERS AS TO THIRD PER-
SONS.

104. Power of Partner to Bind Firm.

105-106. Actual Authority.

107-108. Apparent or Implied Authority.

109-110. Restrictions by Dissent.

111-112. Liability on Contracts.

113. Liability for Torts, Frauds, Breaches of Trust and Crimes.

114-115. Nature of Liability.

116. Extent of Liability.

117. Commencement of Liability.

118. Termination of Liability.

119. For Future Acts.
120-121. Notice of Dissolution.

122. For Past Acts.

123. Application of Assets to Liabilities.

124. Application by Partners.
125-126. Application by Court.
127-128. Priorities in Firm Property.
129-132. Priorities in Separate Property.

Power of Partner to Bind Firm.

104

:

104. A partner may bind his firm by acts which are either —
a) Within the\actual scope\of his authority, or
(b) Within the\apparent scope\of his authority.

Same — Actual Authority.

105. A partner's actual authority to bind the firm is regu-
lated by agreement between them.

[80 AS TO THIRD PERSONS.

106. In the absence of any special agreement upon the subr
ject, a partner has actual authority topmcn^^nrmJMt.

all acts necessary for carrying on the partnership busi-
ness in the usual way.

It has already been seen that the liability of partners, as
such, depends upon the principles of agency.3 The basis of
the liability of the members of a firm is in the fad that they
are principals in any and every transaction; not because they
are credited or held oul .-is partners.2 Of course, any ad
done by a partner within the actual scope of the agency con-
ferred upon him is binding upon all the partners as a firm.3
And a subsequent ratification of an ad is equivalent to an
antecedent authority.4 The actual authority of a partner to
bind his copartners depends upon the agreement between
them. By express contract, they may confer or withhold
whatever authority they see fit, as in the case of any other
principal and agent. In the absence of any express contract
provision upon the subject, it will be presumed that it was
intended that a partner should have authority to hind the
firm by all acts necessary for carrying on the business in the

i See ante, c. 11. See, also, Pooley v. Driver, 5 Ch. Div. 467; Cox
v. Hickman, 8 H. L. Cas. 268, Burdick's Cases, 65, Mechem's Cases, 70.

- Wherman v. McFarlan, 9 Ohio Dec. 400. Dormant partners, when
discovered, are made liable upon this principle. Brooke v. Washing-
ton, 8 Grat. (Va.) 248, 56 Am. Dec. 142. Where a credit is given to
a firm under such a name as "A. & Co.," the latter law presumes that
credit was given to every one who is actually a member, known or
not. Elmira Iron & Steel Rolling Mill Co. v. Harris, 124 N. Y. 280,
26 N. E. 541, Burdick's Cases, 398.

s Where a partner was specially constituted the general agent of
the firm, and was in the habit of borrowing money with the knowl-
edge of his copartners, and without objection, the firm would be lia-
ble, under the agency, for money borrowed by him. Hoskinson v.
Eliot, 62 Pa. 393.

* Casey v. Carver, 42 111. 225; Miller v. Royal Flint Glass Works,.
172 Pa. 70, 33 Atl. 350, Burdick's Cases, 137.

POWER OF PARTNER TO BIND FIRM. 1S1

way such a business is usually conducted, and a partner has
actual and rightful authority to that extent.5 When a part-
nership is formed for a particular purpose, it is in itself a
grant of authority to the acting members of the company to
transact its business in the usual way.6

Notice to Partner is Notice to Firm.

Notice to an acting partner of any matter relating to the
partnership affairs operates as notice to the firm, except in
the case of a fraud upon the firm committed by him, or with
his consent."

Admissions and Representations.

An admission or representation made by one partner con-
cerning the partnership affairs, and in the ordinary course

s Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 837; Brooke v. Wash-
ington, 8 Grat. (Va.) 248, 56 Am. Dec. 142. Each partner is the
agent of his partners in all matters within the scope of the firm busi-
ness. Edwards v. Tracy, 62 Pa. 374. Each partner is the agent of
the partnership as to all contracts and transactions within the scope
of the partnership business, as tested by the nature of the particular
business and its ordinary usages. Alabama Fertilizer Co. v. Rey-
nolds, 79 Ala. 497. A managing partner of a mine has authority to
defray all the necessary and proper expenses incidental to the bene-
ficial working of the mine out of the joint profits derived from the
sale of the minerals. Roberts v. Eberhardt, Kay, 148, 23 L. J. Ch
201, 19 Eng. Rul. Cas. 607.

GHoskinson v. Eliot, 62 Pa. 393; Pooley v. Whitmore, 10 Heisu.
(Tenn.) 634. "The acting partners are identified with the company,
and have power to conduct its business in the usual way. This
power is conferred by entering into the partnership, and is, per-
haps, never to be found in the articles." Winship v. Bank of U. S.,
5. Pet. (U. S.) 529. The principle that one partner may bind the
firm applies as well to partnerships for manufacturing and me-
chanical purposes as to those for commerce. Hoskinson v. Eliot, 62
Pa. 393.

i Williamson v. Barbour, 9 Ch. Div. 535; Lacey v. Hill, 4 Ch. Div.
549; Howland v. Davis, 40 Mich. 546; Tucker v. Cole, 54 Wis. 539,
11 N. W. 703; Gedge v. Cromwell, 19 App. D. C. 192; Adams v. Ash-

182 As T0 THIRD PERSONS.

of its business, is evidence against the firm,s and may be con-
clusive liv way of estoppel. This, however, does not apply
to a representation by one partner as to his authority to bind
the firm,9 nor probably as to the extent and nature of the busi-
nesa "t" the firm, for the extent of his authority depends upon
the nature of that business.

Acts beyond Actual Authority.

A partner who exceeds his actual authority, as fixed by
agreement, or implied in the absence of special agreement,
must indemnify his copartners against any consequent loss;
but it does not follow that, all the partners are not primarily
bound to a third person who dealt with a partner, even
though he exceeds his actual authority, for a principal is
liable for the acts of his agent, not only where they are ac-
tually authorized, but also where they are within the appar-
ent scope of the agent's authority.

It is important, therefore, to ascertain what acts are within
the apparent scope of a partner's authority, for his actual au-
thority to bind the firm will depend on it, in the absence of
special agreement, and his power to bind the firm in the ab-
sence of actual authority will also depend upon it.

Same — Apparent or Implied Authority.

107. A partner has implied authority to do any act neces-

sary for carrying on the firm business, in the ordinary
way.

man, 203 Pa. 536, 53 Atl. 375; Loeb v. Stern, 189 111. 371, 64 N. E.
1043.

s See Fergusson v. Fyffe, 8 Clark & F. 121; Williams v. Lewis, 115
Ind. 45, 17 N. E. 262; Burgan v. Lyell, 2 Mich. 102, Burdick's Cases,
312; Griswold v. Haven, 25 N. Y. 595; Caris v. Nimmons, 92 Mo.
App. 66.

i) Ex parte Agace, 2 Cox, 312, 2 Rev. R. 49.

POWER OF PARTNER TO BIND FIRM. 183

108. The firm is bound by any act within the scope of a
partner's implied authority unless —
Exception —

(a) The act was beyond his real authority, and

(b) The person rivaling with *V>a partner Vtad wr.*^ rfi

such fact.

Prima facie, the acts of every partner who does any act for
carrying on, in the usual way, business of the kind carried
on by the firm of which he is a member binds the firm and
his partners.10

It is competent for the partners, by agreement between
themselves, to restrict the authority of any one or more of
them to bind the firm, and if such an agreement has been en-
tered into, no act done in contravention of it is binding on the
firm with respect to persons having notice of the agreement.11
But such an agreement does not affect persons who deal with

10 See preceding section. See, also, Woodruff v. Scaife, 83 Ala.
152. 3 So. 311; Eastman v. Cooper, 15 Pick. (Mass.) 276; Irwin v.
Williar, 110 U. S. 499; Winship v. Bank of U. S., 5 Pet. (U. S.) 529;
Banner Tobacco Co. v. Jenison, 48 Mich. 459, 12 N. W. 655; Brooke v.
Washington, 8 Grat. (Va.) 248, 56 Am. Dec. 142; Crane Co. v. Tier-
ney, 175 111. 79, 51 N. E. 715; Pooley v. Whitmore, 10 Heisk. (Tenn.)
634. A partner may enter into contracts in the ordinary business of
the firm, sell or pledge goods, draw, negotiate, indorse, or accept bills
or other negotiable securities, and do any other acts incident or ap-
propriate to such trade. Hoskinson v. Eliot, 62 Pa. 393.

ii Brooks- Waterfield Co. v. Carpenter, 21 Ky. L. R. 851, 53 S. W.
40; Straus v. Kohn, 83 111. App. 497; Bromley v. Elliot, 38 N. H. 287;
Baxter v. Rollins, 90 Iowa, 217, 57 N. W. 838; Wilson v. Richards,
28 Minn. 337, 9 N. W. 872; Bailey v. Clark, 6 Pick. (Mass.) 372. The
partner making the contract is bound, but not the other members of
the firm. G. H. Haulenbeck Advertising Agency v. November (City
Ct. N. Y.) 60 N. Y. Supp. 573. "Where a note has been made or in-
dorsed by a partner in violation of his duty and authority, if the
holder who receives it has been guilty of gross negligence in receiv-
ing it, it will not be binding in his hands on the partnership." Dear-
dorf's Adm'r v. Thacher, 78 Mo. 135, citing Story, Partn. § 130.

L84 AS TO THIRD PERSONS.

a partner whose authority is thus restricted, without notice of
the agreement,12 unless, indeed, they do not know or believe
him to be a partner; for in thai case he 1ms neither real nor,

so far as they are concerned, apparent authority to hind the
firm.13

A partner's implied or apparent authority to hind his firm
is Limited to acts which are necessary for carrying on the
partnership business in the way in which such businesses are
usually carried on, and does not extend to acts, which, how-
ever urgent, are in this sense unusual.1 '

e-' Cox v. Hickman, 8 H. L. Cas. 304, Mechem's Cases, 70; Vance v.
Blair, 18 Ohio, 532; Leavitt v. Peck, 3 Conn. 125, Mechem's Cases,
308; Winship v. Bank of U. S., 5 Pet. (U. S.) 529; Crane Co. v. Tier-
ney, 175 111. 79, 51 N. E. 715; Hotchin v Kent, 8 Mich. 526; Irwin v.
Williar, 110 U. S. 499; Hoskinson v. Eliot, 62 Pa. 393. Stipulations
in articles of partnership are to regulate the rights and conduct of
the partners as among themselves. The trading world cannot know
them, but must trust to the general powers of all partnerships. Hos-
kinson v. Eliot, 62 Pa. 393. Although articles may deny to one part-
ner the right to bind the firm by his separate act, within the scope
of its business, he has the power, for the world cannot know and
are not to be affected by such limitations. Edwards v. Tracy, 62 Pa.
374.

"Nicholson v. Ricketts, 2 El. & El. 524; Holme v. Hammond, L.
R. 7 Exch. 233.

i* Hawtayne v. Bourne, 7 Mees. & W. 595; Simpsop's Claim, 36
Ch. Div. 532; Woodruff v. Scaife, 83 Ala. 152, 3 So. 3ll; Brettel v.
Williams, 4 Exch. 630; Berry v. Folkes, 60 Miss. 576; Cotzhausen v.
Judd, 43 Wis. 213; Barnard v. Lapeer & P. H. Plank Road Co., 6 Mich.
274. What is necessary to carry on the business in the ordinary way
is the test of authority when no actual authority or ratification can
be proved. Pooley v. Whitmore, 10 Heisk. (Tenn.) 634. "Where, by
the agreement of the parties, the management and control of a busi-
ness association are given to one of its members, and the nature and
character of the business necessarily involve varied duties and re-
sponsibilities, the parties to such agreement will be held to have im-
pliedly given to the managing member, where nothing appears to
the contrary, the requisite power and authority to discharge such du-
ties and obligations in the ordinary and usual course of business."
Morse v. Richmond, 97 111. 310.

POWER OF PARTNER TO BIND FIRM. 185

If a partner does an net for a purpose apparently not con-
nected with the firm's ordinary course of business, he is not
acting in pursuance of any apparent authority, and the firm
will not. be bound unless the partner in fact had authority.15
If, for instance, a partner pledges the credit of the firm for a
purpose apparently not connected with its ordinary course of
business, e. g\, for the purpose, to the knowledge of the cred-
itor, of paying his private debts,10 the firm is not bound un-
less he is in fact specially authorized by the other partners.1'
The onus of proving such authority is on the creditor, and it
is not sufficient for him to prove that he honestly believed
there was such authority,18 unless the other partners arc,
by their conduct, estopped from denying the authority.19

Particular Powers.

Whether or not any particular act is necessary to the trans-
action of a business in the way it is usually carried on is a
■question to be determined by the nature of the business, and
by the practice of persons engaged in it. This must once
have been in all cases, as it still would be in a new case, a
puestion of fact.20 But as to a certain number of frequent

is Livingston v. Roosevelt, 4 Johns. (N. Y.) 251; Brooks-Waterfield
Co. v. Jackson, 21 Ky. L. R. 854, 53 S. W. 41; Standard Wagon Co. v.
Few, 119 Ga. 293, 46 S. E. 109.

I'-Leverson v. Lane, 13 C. B. (N. S.) 278; In re Riches, 4 De Gex,
J. & S. 581; Snaith v. Burridge, 4 Taunt. 684.

i" A partner cannot pledge partnership goods to secure the pay-
ment of advances made to buy goods in the name of another firm, of
which he was a member. Brooks-Waterfield Co. v. Carpenter, 21 Ky.
L. R. 851, 53 S. W. 40.

is Kendal v. Wood, L. R. 6 Exch. 243.

i9 Kendal v. Wood, L. R. 6 Exch. 243.

20 Whether partners are engaged in business as merchants on their
own account, or are selling on commission for others, is a question
of fact, and is to be determined, not by any privae agreement be-
tween themselves, but by the nature of the business actually done
by them with the public. Alabama Fertilizer Co. v. Reynolds, 79

IS.; AS TO THIRD PERSONS.

and important transactions, there arc well-understood usuages
extending to all trade partnerships, and constantly recognized
by the courts. These have become, in effect, rules of law.2'
Bu1 inasmuch as an act which is common in carrying on one
kind of business in the usual way may not be required for
carrying on business of another kind, any general statement
vhat acts arc and what acts are not within the implied
authority of a partner mus1 he applied with caution, and it
has been -aid that no answer of any value can be given to the
abstract question: Can one partner hind his copartners by
such and such an act?22 ISTevertheless, in the absence of evi-

Ala. 497. "Whether a particular act was within the scope of the
firm business is a question of fact. Hefferlin v. Karlman, 29 Mont.
139, 74 Pac. 201.

2i In commercial partnerships, the extent of a partner's power to
bind the firm is a question of law. Farmer v. Bank of Wickliffe, 21
Ky. L. R. 425, 51 S. W. 586. In the case of commission merchants,
engaged only in the business of selling on commission for others,
purchases on their own account being outside of the scope of that
business, one partner cannot bind the other by a purchase on credit
in the partnership name. Alabama Fertilizer Co. v. Reynolds, 79
Ala. 497. It is within the implied authority of a member of a firm
engaged in manufacturing and selling paper to purchase paper to fill
an emergency order. Buckley v. Wood, 9 Kulp (Pa.) 189. A partner
in a firm formed to cultivate the lands of one of the partners has no
implied power to sell the live stock and farming utensils of the firm
without the consent of the copartner. Rutherford v. McDonnell, 66
Ark. 448, 51 S. W. 1060.

22 "The question whether a given act can or cannot be necessary
to the transaction of the business in the way it is usually carried
on must evidently be determined by the nature of the business, and
by the practice of persons engaged in it. Evidence on both these
points is necessarily admissible, and, as readily may be conceived,
an act which is necessary for the prosecution of one kind of business
may be wholly unnecessary for the carrying on of another in the
ordinary way, consequently no answer of any value can be given to
the abstract question, Can one partner bind his firm by such an act?
Unless having regard to what is usual in business, it can be predi-
cated of the act in question, either that it is one without which no
business can be carried on, or that it is one which is not necessary

POWER OF PARTNER TO BIND FIRM. 1ST

dence of a usage in the kind of business in question to the
contrary, it seems that a partner has impjjed or ar/ojiient au-
thority to do the following acts ou behalf of his firm, viz. :
Receive payment and give receipts for debts dnp..to.IuA-&im.v2,3
and^ (probably) retain an attorney to conduct .an action io re- Jj_
cover such debts;2'3 assign choses in action;25 draw cheques,
not postdated,2^ on the, bankers of the_ firm1 in,, \j\f(l firm-- (cLy
name;27 make contracts in reference to the business of the
firm;2S insure firm property;29 purchase, mi credit of the

for the carrying on any business, whatever. There are obviously
very few acts of which such an affirmation can be truly made. The
great majority of acts which give rise to doubt are those which are
necessary in one business, and not in another. Take, for example,
negotiable instruments. It may be necessary for one member of a
firm of bankers to draw, accept, or indorse a bill of exchange on be-
half of the Arm, and to require that each member should put his
name to it would be ridiculous; but it by no means follows, nor is
it in fact true, that there is any necessity for one of several solicitors
to possess a similar power, for it is no part of the ordinary business
of a solicitor to draw, accept, or indorse bills of exchange. The ques-
tion, therefore, Can one partner bind the firm by accepting bills in
its name? admits of no general answer. The nature of the business
and the practice of those who carry it on (usage or custom of trade)
must be known before any answer can be given." Pooley v. Whit-
more, 10 Heisk (Tenn.) 635.

23 Stead v. Salt, 3 Bing. 103, 28 Rev. R. 603; Porter v. Taylor, 6
Maule & S. 156, 18 R. R. 338; Steele v. First Nat. Bank, 60 111. 23;
Vanderburg v. Bassett, 4 Minn. 242; Wyckoff v. Anthony, 9 Daly
(N. Y.) 417; Heartt v. Walsh, 75 111. 200; Major v. Hawkes, 12 111.
298; Allen v. Farrington, 2 Sneed (Tenn.) 526.

24 Court v. Berlin [1897] 2 Q. B. 396.

-•-Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 837; Sullivan v.
Visconti, 68 N. J. Law, 543, 53 Atl. 598.
2fi Forster v. Mackreth, L. R. 2 Exch. 163.

27 Laws v. Rand, 3 C. B. (N. S.) 442.

28 Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 837; First Nat. Bank
v. Rowley, 92 Iowa, 530, 61 N. W. 195; Davis v. Dodson, 95 Ga. 718,
22 S. E. 645, Burdick's Cases, 338.

20 Hillock v. Traders' Ins. Co., 54 Mich. 531, 20 N. W. 571; Osgood
v. Glover, 7 Daly (N. Y.) 367; McGrath v. Home Ins. Co., 88 App.

1S8 AS TO THIRD PERSONS.

firm, gnods required for carrying on its business in the usual
w :iv r" sell any of the partnership goods ;31 transfer fira} prop-
erty in paymenl of firm debts:32 and engage servants ot
[s fur tin1 partnership business.33
\ sharp distinction is to be noted as to the apparenl power
of partners lift ween trading and non-trading partnerships.
lf_thc partnership is an ordinary trading partnership, a part-

Div. 153, 84 N. Y. Supp. 374; Peoria Marine & Fire Ins. Co. v. Hall,
:-2 .Midi. 202.

80 Bond v. Gibson, 1 Camp. 185, Burdick's Cases, 311, 10 Rev. R.
665; Gardiner v. Childs, 8 Car. & P. 345; Irwin v. Williar, 110 U. S.
499; Venable v. Levick, 2 Head (Tenn.) 351; McPherson v. Bristol,
122 .Mich. 354, 81 N. W. 254; Crane Co. v. Tierney, 175 111. 79, 51 N.
E. 715; McDonald v. Fairbanks, 161 111. 124, 43 N. E. 783; Stecker v.
Smith, 46 Mich. 14, 8 N. W. 583; Cameron v. Blackman, 39 Mich.
108; Chappie v. Davis, 10 Ind. App. 404.

"i Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 837; Simonton v.
Sibley, 122 U. S. 220; Hudson v. McKenzie, 1 E. D. Smith (N. Y.)
358; Christ v. Firestone (Pa. Sup.) 11 Atl. 395; Graser v. Stellwagen,
25 N. Y. 315; Bender v. Hemstreet, 12 Misc. 620, 34 N. Y. Supp. 423;
Sloan v. Moore, 37 Pa. 217; Lambert's Case, Godb. 244, Burdick's
Cases, 210; Dore v. Wilkinson, 2 Starkie, 287. A bill by one claiming
to be a partner, to obtain conveyance of an interest in land claimed
to be partnership land, which alleges that the partnership was
formed for the purpose of buying and selling land, does not state a
cause of action against a vendee of one of the alleged partners,
since, if the vendor was a partner, he had authority to sell the land.
Young v. Wheeler, 34 Fed. Rep. 98. As to a sale of all the partner-
ship property, see Freeman v. Abramson, 30 Misc. 101, 61 N. Y. Supp.
839; Lowman v. Sheets, 124 Ind. 417, 24 N. E. 351, Mechem's Cases,
300. Where the partnership was for the cultivation of the land of
one partner, the other partner has no implied authority to sell the
livestock and farming utensils of the firm. Rutherford v. McConnell,
C6 Ark. 448, 51 S. W. 1060.

32 Van Brunt v. Applegate, 44 N. Y. 544. See, also, Hanchett v.
Gardner, 138 111. 571, 28 N. E. 788; Janney v. Springer, 78 Iowa, 617,
43 X. W. 461.

--Beckham v. Drake, 9 Mees. & W. 79; Donaldson v. Williams, 1
Cromp. & M. 345; Weaver v. Tapscott, 9 Leigh (Va.) 424; Brooke v.
Washington, 8 Grat. (Va.) 248, 56 Am. Dec. 142; Sweeney v. Neely,
53 Mich. 421, 19 N. W. 127; Mead v. Shepard, 54 Barb. (N. Y.) 474;

POWER OF PARTNER TO BIND FIRM. ISO

ner has implied authority to draw, accept, make, and indorse
bills of exchange, and pro™issoffi,,^°tes, in the name of the
firm.34 But a member of a firm of mining adventurers ;35
quarry workers;36 farmers;37 planters,38 millers,39 attorneys,
solicitors, and counselors at law,40 physicians and surgeons,44
or a partner in establishing and carrying on water works,42
or gas works,43 in publishing,44 in sugar refining,45 in keep-

Barcroft v. Haworth, 29 Iowa, 462. Compare Straus v. Kohn, 83 111.
App. 497; Palliser v. Erhardt, 46 App. Div. 222, 61 N. Y. Supp. 191.

s* In re Riches, De Gex, J. & S. 581; Stephens v. Reynolds, 5 Hurl.
& N. 513; Pooley v. Whitmore, 10 Heisk. (Tenn.) 636; Palmer v.
Scott, 68 Ala. 380; Wagner v. Simmons, 61 Ala. 143. "In commercial
partnerships, a note executed by one member in the firm name, is
prima facie the obligation of the firm, and if one of the parties seeks
to avoid its payment, the burden of proof lies upon him to show that
the note was given in a matter not relating to the partnership busi-
ness, and that, also, with the knowledge of the holder of the note."
Lee v. First Nat. Bank, 45 Kan. 9, citing Deitz v. Regnier, 27 Kan.
94. To the same effect is Third Nat. Bank v. Snyder, 10 Mo. App.
App. 213. The taker of a promissory note or bill of exchange of a
trading partnership may lawfully presume that it was given in a
partnership transaction. Stevens v. McLachlan, 120 Mich. 285, 79
N. W. 627.

35 Dickinson v. Valpy, 10 Barn. & C. 128; Ricketts v. Bennett, 4
C. B. 686; Bult v. Morrell, 12 Adol. & El. 745.

3c Thicknesse v. Bromilow, 2 Cromp. & J. 425.

3T Greenslade v. Dower, 7 Barn. & C. 635, 31 Rev. R. 272; Ulery v.
Ginrich, 57 111. 531.

ss Prince v. Crawford, 50 Miss. 344; Benton v. Roberts, 4 La. Ann.
216.

30 Graves v. Kellenberger, 51 Ind. 66; Lanier v. McCabe, 2 Fla. 32.

■*oHedley v. Bainbridge, 3 Adol. & E. (N. S.) 316; Levy v. Pyne,
Car. & M. 453; Friend v. Daryee, 17 Fla. 116; Smith v. Sloan, 37 Wis.
285; Breckinridge v. Shrieve, 4 Dana (Ky.) 375.

4i Crosthwaite v. Ross, 1 Hump. (Tenn.) 23; Lewis v. Reilly, 1
Q. B. 349.

*- Broughton v. Manchester & Salford Waterworks Co., 3 Barn. &
Aid. 1.

•*3 Bramah v. Roberts, 3 Bing. N. C. 963.

44 Pooley v. Whitmore, 10 Heisk. (Tenn.) 629.

45 Livingston v. Roosevelt, 4 Johns. (N. Y.) 251.

190 AS TO THIRD PERSONS.

ing a tavern,46 in owning a ship,47 in digging tunnels,48 in
carrying en a laundry,49 in keeping a store and rope-walk,50
or in any other nontrading firm,61 lias no such implied au-
thority. So, a member of a trading partnership may borrow
money on the credit of the firm,52 and for that purpose pledge

*« Cocke v. Branch Bank at Mobile, 3 Ala. 175.
«7 Williams v. Thomas, 6 Esp. 18.

48 Gray v. Ward, 18 111. 32.

49 Neale v. Turton, 4 Bing. 149.

•"Wagnon v. Clay, 1 A. K. Marsh. (Ky.) 257.

5i Smith v. Sloan, 37 Wis. 285; Third Nat. Bank v. Snyder, 10 Mo.
App. 216; Deardorf's Adm'r v. Thacher, 78 Mo. 128; Pooley v. Whit-
more, 10 Heisk. (Tenn.) 636. "In partnerships of occupation, when
one member executes a note in the firm name, the holder must show
express or implied authority from the firm to make the note, before
a recovery can be had." Lee v. First Nat. Bank, 45 Kan. 8, 25 Pac.
196, citing Smith v. Sloan, 37 Wis. 285; Judge v. Braswell, 13 Bush
(Ky.) 67; Horn v. Newton City Bank, 32 Kan. 518, 4 Pac. 1022. In
the absence of evidence of a custom or usage among coffee brokers
showing that a firm of such brokers is a trading partnership, it can-
not be held that negotiable paper signed in the name of the firm by
one member thereof, without the other's consent, and not used in the
firm business, is good in the hands of an innocent holder for value.
Third Nat. Bank v. Snyder, 10 Mo. App. 211. "Partners engaged 'in
trade' have an authority, implied by law to bind each other by com-
mercial paper executed in the firm name. Partners in other business,
such as farming, mining, etc., have prima facie no such authority;
but this presumption against lack of authority may be rebutted by
showing that the organization and particular purposes of the firm
are such as to render it in the special instance necessary, or if not
necessary, usual in similar cases." Deardorf's Adm'r v. Thacher, 78
Mo. 131.

52 Palmer v. Scott, 68 Ala. 380; Wagner v. Simmons, 61 Ala. 146;
Harris County v. Donaldson, 20 Tex. Civ. App. 9; Pahlman v. Taylor,
75 111. 629; Church v. Sparrow, 5 Wend. (N. Y.) 223; Sherwood v.
Snow, 46 Iowa, 481; Lane v. Williams, 2 Vern. 292, Burdick's Cases,
488; Bank of Australasia v. Breillat, 6 Moore, P. C. 152. It is within
the power of a partner in the mercantile business to borrow money
in the name of the firm, and to bind the firm by an agreement to pay
interest on the same at any lawful rate, and to sign the firm name,
to any writing admitting the fact of borrowing and promising to
pay, and thereby furnish evidence against the firm and each of its

POWER OF PARTNER TO BIND FIRM. 101

the personal property of the firm,53 and (probably) make an
equitable mortgage by deposit of deeds or otherwise of its real
or leasehold property.54

A partner has no implied authority to bind his firm by a
submission to arbitration;55 to bind his firm by deed, even
though the partnersnip be constituted by deed , b to make an

members. Walsh v. Lennon, 98 111. 27. In contracts as to negotiable
paper, there is no distinction between a general and a special part-
nership, and the partnership is liable for money borrowed by one
partner on the credit of the firm within the scope of its business.
Hoskinson v. Eliot, 62 Pa. 393. A partnership in the business of buy-
ing and selling cattle is a trading partnership, one of the incidents
of which is the right to borrow money for the purposes of the busi-
ness. Smith v. Collins, 115 Mass. 388.

53 Ex parte Bonbonus, 8 Ves. 540; Butchart v. Dresser, 10 Hare,
453, 4 De Gex, M. & G. 542; Richardson v. Lester, 83 111. 55; Buett-
ner v. Steinbrecher, 91 Iowa, 588, 60 N. W. 177; Woodruff v. King,
47 Wis. 261, 2 N. W. 452.

64 Lindl. Partn. p. 152. And see In re Clough, 31 Ch. Div. 324.

55 Stead v. Salt, 3 Bing. 101, 28 Rev. R. 602; Adams v. Bankart, 1
Cromp., M. & R. 681; Buchanan v. Curry, 19 Johns. (N. Y.) 137;
Buchoz v. Grandjean, 1 Mich. 367. But see Hallack v. March, 25 111.
48. See, also, Davis v. Berger, 54 Mich. 652, 20 N. W. 629; Gay v.
Waltman, 89 Pa. 453.

se Harrison v. Jackson, 7 Term R. 207, Burdick's Cases, 343, 4 Rev.
R 422; Steiglitz v. Egginton, Holt, N. P. 141; Gibson v. Warden, 14
Wall. (U. S.) 244; Mackay v. Bloodgood, 9 Johns. (N. Y.) 285; Walsh
v. Lennon, 98 111. 27. A release under seal executed by one partner
is an exception to this rule and is binding upon the firm. Dyer v.
Sutherland, 75 111. 583; Gillilan v. Sun Mut. Ins. Co., 41 N. Y. 376.
A partner constituted by articles "the agent, and to have the general
supervision" of the business of the firm, is not therefore authorized
to bind the firm by a note under seal. A partner cannot bind the
firm by deed; a specialty executed by him in the name of the firm
binds himself only. Hoskinson v. Eliot, 62 Pa. 393. "There are many
respectable authorities to the position that, while one partner cannot
bind his copartners by deed, yet, if the instrument used in commer-
cial transactions be valid and effective without a seal, and within
the power of a partner, the attempt to seal the same in behalf of the
firm will not vitiate its legal effect as an unsealed instrument."
Walsh v. Lennon, 98 111. 32, citing Pars. Partn. (2d Ed.) p. 191,
note m; Price v. Alexander, 2 G. Greene (Iowa) 427; Lawrence v.

192 AS TO THIRD PERSONS.

assignmenl for the benfil of creditors;67 to confess judg-
menl ::,s to mortgage firm realty ;59 to give a guaranty on be-
half of the firm,80 to give accomodataion paper;61 to make his

Taylor, 5 Hill (N. Y.) 107; Sweetzer v. Mead, 5 Mich. 107; Tapley v.
Butterfleld, 1 Mete. (Mass.) 515, Burdick's Cases, 211; Gibson v.
Warden, 14 Wall. (U. S.) 247; and authorities collated in 9 Am.
Law Reg. (N. S.) pp. 271, 272. And see Edwards v. Dillon, 147 HI.
14, 35 N. E. 135.

57 Pox v. Curtis, 176 Pa. 52, 34 Atl. 952; Wells v. March, 30 N. Y.
344; Williams v. Frost, 27 Minn. 255, 6 N. W. 793; Loeb v. Pierpoint,
58 Iowa, 469, 12 N. W. 544; Shattuck v. Chandler, 40 Kan. 516, 20
Pac. :'i:>. Mechem's Cases, 296. A managing partner has no right to
make an assignment for the benefit of creditors. Cox v. Swofford
Bros. Dry Goods Co., 2 Ind. T. 61, 47 S. W. 303. But compare Claf-
flin Co. v. Evans, 55 Ohio St. 183, 45 N. E. 3.

ssHall v. Lanning, 91 U. S. 160; Soper v. Fry, 37 Mich. 236; Hier
v. Kaufman, 134 111. 215, 25 N. E. 517; North v. Mudge, 13 Iowa, 496.

so Napier v. Catron, 2 Humph. (Tenn.) 534.

bo Brettel v. Williams, 4 Exch. 623; Andrews v. Planters' Bank, 7
Smedes & M. (Miss.) 192; Clarke v. Wallace, 1 N. D. 404, Mechem's
Cases, 301. See, also, Pooley v. Whitmore. 10 Heisk. (Tenn.) 631.
He may do so for partnership purposes within the scope of the part-
nership business. Wilkins v. Pearce, 5 Denio (N. Y.) 541; Jordan
v. Miller, 75 Va. 442. An agreement to save a surety for a third per-
son harmless is outside of the scope of the partnership business of
a firm of attorneys. Seeberger v. Wyman, 108 Iowa, 527, 79 N. W.
290.

';i Talmage v. Millikin, 119 Ala. 40, 24 So. 843. '"The giving of
accommodation paper,' says Mr. Parsons, 'is considered so far out of
the line of regular commercial business that, if such paper be made
and given by one member of a firm, the other party will not be
holden to any party chargeable with notice that it is accommodation
paper, unless it was made with their consent.' 1 Pars. Bills, 141.
And thus it is said, 'if it appears on the face of the bill that it was
signed by a partnership as sureties, this will be notice to any one
who may take it that it was given out of the course of partnership
business, and no subsequent holder can recover on it without prov-
ing the assent of all the parties to the signature.' 1 Pars. Bills, 140.
The same principle applies to all cases where one indorsed on behalf
of the firm for third persons. For suretyship and accommodation
indorsements, say the authorities, are not within the business of a
partnership. 1 Pars. Bills, 140." Pooley v. Whitmore, 10 Heisk-
(Tenn.) 632.

POWER OF PARTNER TO BIND FIRM. 193

partners partners with other persons in another business,62 to
accept shares, though fully paid up, in a company in satis-
faction of a partnership debt.03

Same — Kestriction by Dissent.

109. Any act within the apparent, or implied authority of a
nartner will not bind a partner who has given notice
that he dissents therefrom, except: —

Exceptions —

(a) Where the act is one which a majority may do, the

minority are bound, though they dissent.

(b) A partner cannot, by a dissent, impose additional bur-

dens or responsibilities upon third persons.

no. A partner cannot, by dissent, deprive a copartner of
powers expressly conferred upon him by the partner-
ship articles.

The implied authority of a partner to do certain acts or
make certain contracts may be to some extent, revoked by his
copartners, who may thus escajDe liability for such acts or con-
tracts.64 If the implied authority is only apparent, and not
actual, of course the communicated dissent of any partner to
its exercise operates as notice of that fact, and, as has been
seen, the firm is not bound to one having notice that the pro-
posed act is beyond the partner's authority. If the implied
authority is actual, the effect of notice of dissent depends
upon the nature of the proposed act. If such act relates to

62 Singleton v. Knight, 13 App. Cas. 788.

«3 Neiman v. Neiman, 43 Ch. Div. 198. Cf. Weikersheim's Case,
L. R. 8 Ch. 831.

c^Leavitt v. Peck, 3 Conn. 124, Mechem's Cases, 308; Knox v. Buff-
ington, 50 Iowa, 320; Griswold v. Waddington, 16 Johns. (N. Y.)
438; Yeager v. Wallace, 57 Pa. 365.
13

194 AS TO THIRD PERSONS.

a matter as to which the majority have a right to control, they
may forbid it, and a third person having notice of this fact
can riot hold them liable;86 but if the majority determine to
do the act, the minority will be bound, although they dis-
Bent.66 The powers of a majority have been already con-
sidered. ,;T

With the exceptions mentioned in the above black-letter
icxt, one of two partners can always escape liability by giv-
ing notice of his dissent to the proposed act, because, as has
been seen, in such a case the partner who forbids a change pre-
vails.68 A partner cannot, by notice of dissent, impose ad-
ditional burdens or responsibilities upon a person who has
dealt with the firm. Thus, one partner cannot, by notice,
take away a debtor's right to pay either partner,69 nor can he
forbid his partner to pay a firm debt.70 A dissent may be
waived by subsequently accepting the benefits of the forbidden
act,71

G5 Carr v. Hertz, 54 N. J. Eq. 127, 33 Atl. 194, Burdick's Cases, 356.

ee Johnston v. Dutton's Adm'r, 27 Ala. 245, Mechem's Cases, 304;
Nolan v. Lovelock, 1 Mont. 224.

67 See ante, § 96 et seq.

esLeavitt v. Peck, 3 Conn. 125, Mechem's Cases, 308; Wipperman
v. Stacy, 80 Wis. 345, 50 N. W. 336, Mechem's Cases, 309; Monroe v.
Conner, 15 Me. 178; Clements v. Norris, 8 Ch. Div. 129. But see
Wilkins v. Pearce, 5 Denio (N. Y.) 541; Johnson v. Bernheim, 76
N. C. 139. See, also, ante, § 96, "Powers of Majority." A partner is
not liable for the price of goods sold to his copartner over his pro-
test, and after notice that he would not be bound. Dawson, Black
more & Co. v. Elrod, 20 Ky. 1436.

sfl Xoyes v. New Haven, etc. R. Co., 30 Conn. 1; Steele v. First Nat.
Bank, 60 111. 23; Gillilan v. Sun Mut. Ins. Co., 41 N. Y. 376.

70-Mabett v. White, 12 N. Y. 442. But see McGrath v. Cowen, 57
Ohio St. 385, 49 N. E. 338.

Ti Johnston v. Bernheim, 86 N. C. 339; Campbell v. Bowen, 49 Ga.
417; Pearce v. Wilkins, 2 N. Y. 469; Mason v. Partridge, 66 N. Y.
633. But see Monroe v. Conner, 15 Me. 178.

LIABILITY ON CONTRACTS. 195

Liability on Contracts.

hi. All members of a firm are liable upon contracts made
by one partner, provided the following conditions con-
cur, viz.:

(a) The contract must be within the scope of the partner's

express or implied authority.

(b) The other party must not have had notice of any lim-
itation upon the actual authority of the partner to
make the contract.

(c) The partner must have acted as agent for the firm, and

not as a principal in the transaction.

112. The mere fact that the firm received a benefit from a

partners act is not sufficient to make it liable, if it
would not otherwise be liable..

In General.

The liability of partners upon contracts made by their co-
partner, so far as it depends upon the scope of his actual or
implied authority and notice thereof by the other party, has
already been sufficiently considered while treating of a part-
ner's power to bind the -firm. One more condition of liabil-
ity remains to be considered.

In order that a firm may be bound by the acts of a partner
or other agent acting within his authority, the agent whose
acts are sought to be imputed to his firm must have acted in
his character of agent, and not as principal. If he acted as
principal, and not as agent, lie alone is liable for such acts.72
Whether a contract is entered into by an agent, as such, or by

"When a member of a partnership borrows money upon his own
account, but representing that it is to be used in the partnership
business, the partnership is not liable therefor. To bind the firm,
the lender must understand that he is dealing with the firm through
the agency of the partner negotiating the loan. Ah Lep v. Gong
Choy, 13 Or. 205, 9 Pac. 483.

196 AS TO THIRD PERSONS.

liim as a principal, is often, bu1 not always, apparenl from
the form of the contract.73 It is a question of faci dependent
upon the intent, understanding, and agreement of the par-
ties.74

Apart from any genera] rule of law relating to the exc-
cution of deeds or negotiable instruments, an act or instru-
ment relating to the business of the firm, and done or exe-
cuted in the firm name, or in any oilier manner showing an
intention to bind the firm by any person thereto authorized,
whether a partner or not, is binding on the firm and all the
partners, including secret, silent, dormant, and nominal part-
ner-.7'"' Where the connection of the firm with the transac-
tion was unknown or concealed, it may nevertheless be made

73 Lindl. Partn., p. 176. The use of the pronoun "I" instead of
"we" in a promissory note does not interfere with its legal effect to
bind the firm. Weirick v. Graves, 73 111. App. 266.

-i Tyler v. Waddingham, 58 Conn. 375, 20 Atl. 335; Peterson v.
Roach, 32 Ohio St. 374; Hoeflinger v. Wells, 47 Wis. 628, 3 N. W. 589.
Whether money lent to a member of a firm is advanced upon his
credit or upon that of the firm of which he is a member, and whether
the individual check of such person given for the loan is so far pay-
ment thereof as to leave the creditor no recourse to the firm, are
questions of fact dependent upon the intent, understanding, and
agreement of the parties. Smith v. Collins, 115 Mass. 388. "When
one deals with a partner in matters relating to the partnership busi-
ness, it ought to be inferred that he deals on the credit of the part-
ship, unless the circumstances prove that, though apprised of the
partnership, he meant to give individual credit. It would be hard
to hold him bound to prove that he knew of the partnership, and
dealt on its credit." "The presumption is in the affirmative; and
to discharge the firm it ought to appear clearly that he gave credit
to the individual alone, and intended to absolve the other partners. ""
Brooke v. Washington, 8 Grat. (Va.) 248, 56 Am. M. Dec. 145.

"5 Locke v. Lewis, 124 Mass. 1; Brooke v. Washington, 8 Grat.
(Va.) 248; Bromley v. Elliot, 38 N. H. 287; Reid v. Hollinshead, 4
Barn. & C. 867; Ames' Cas. 29; Pitkin v. Benfer, 50 Kan. 108, 31
Pac. 695, Mechem's Cases, 313; Winship v. Bank of U. S., 5 Pet.
(U. S.) 529; Cleveland v. Woodward, 15 Vt. 302, Mechem's Cases,.
318; Reynolds v. Cleveland, 4 Cow. (N. Y.) 282.

LIABILITY ON CONTRACTS. 197

liable under the rule of undisclosed principal, and the other
party has his election to hold the agent personally liable, or
to proceed against the firm as a principal.76 The necessity,
use, and purpose of a firm name have already been con-
sidered.77

Bills and Notes.

yho. signature of the firm name to a bill of exchange or
promissory note is equivalent to the signature, by the person
so signing, of the names of all the persons liable as partners / .-"-'
in that firm, but subject to the qualification that no person ^ \ *
whose name is not on a bill or note is liable to be sued upon
it.7^ If two persons, A. and another, partnersintraaeT^
carry on business in the name of A., and a bill is accepted for
partnership purposes by one of them in A.'s name, both part-
ners will be liable thereon.79 And unless A. also carries on
a separate business in his own name, the onus of proving that
a bill in A.'s name is in fact the bill of A., and not of the '
firm, appears to be on the other partner.80 If there are two
firms with one name, a member of both firms is liable on all
bills in the firm name, but a member of only one of such firms
will not be liable unless the person giving the bill had author-

™ Howell v. Adams, 68 N. Y. 314; McNair v. Rewey, 62 Wis. 167,
22 N. W. 339; Morse v. Richmond, 97 111. 303; Clement v. British
American Assur. Co., 141 Mass. 298, 5 N. E. 847.

" See ante, c. 5, "Firm Name."

78 English Bills of Exchange Act 1882, §§ 23, 89; Faith v. Rich-
mond, 11 Adol. & E. 339; Beebe v. Rogers, 3 G. Greene (Iowa) 319;
Drake v. Elwyn, 1 Caines (N. Y.) 184; National Bank v. Thomas, 47
N. Y. 15; Gates v. Hughes, 44 Wis. 332; LeRoy v. Johnson, 2 Pet.
(U. S.) 186.

79 Stephens v. Reynolds, 5 Hurl. & N. 513. See, also, Rumsey v.
Briggs, 139 N. Y. 323, 34 N. E. 929.

so See Yorkshire Banking Co. v. Beatson, 5 C. P. Div. 115, Bur-
dick's Cases, 141; Bank of Rochester v. Monteath, 1 Denio (N. Y.)
402; U. S. Bank v. Binney, 5 Mason, 189; Fed. Cas. No. 16.791.

19S AS TO THIRD PERSONS.

ity to use, and did in fad use, the name of that firm of which
he is a member.81

d Instruments.
No person can sue or be suc»l upon an indenture unless ho

In- nanii'il ;i~ iTpiiriy thereto.82 If an agent executes a deed
in his own name, he, and he only, can sue or" "be sued upon

i inn.-- hi-
authority to do so is conferred by deed.84 It is ruled in
England thai even if the partnership he constituted by deed
an express authority under seal is necessary to enable a part-
ner to hind his firm by deed,85 hut the American doctrine
seems to he that actual authority, given in any form, by the
other partners, is all that is needful to permit a partner to
bind the firm by an instrument under seal.85a The best and
safest method of making a partnership deed is for each part-
ner to sign it with his individual name, and add his seal,
though it seems that one seal may be adopted as the seal of
all the partners.86

Reception of Benefit by Firm.

If a partner does an act on his own behalf, or otherwise, so
as not to bind the firm, the firm will not be hound merely by

si Swan v. Steele, 7 East, 210, 8 Rev. R. 618; Cushing v. Smith, 43
Tex. 261; Miner v. Downer, 19 Vt. 14; Hastings Nat. Bank v. Hib-
bard, 48 Mich. 452, 12 N. W. 651, Mechem's Cases, 322.

82 Lord Southampton v. Brown, 6 Barn. & C. 718, 30 Rev. R. 511.

s3Appleton v. Binks, 5 East, 148, 7 Rev. R. 672; North Pennsyl-
vania Coal Co.'s Appeal, 45 Pa. 181; Tom v. Goodrich, 2 Johns.
(N. Y.) 214.

s* Berkeley v. Hardy, 5 Barn. & C. 355, 29 Rev. R. 261; White v.
Cuyler, 6 Term R. 176, 3 Rev. R. 147.

85 Harrison v. Jackson, 7 Term R. 207, Burdick's Cases, 343, 4
Rev. R. 422; Steiglitz v. Egginton, Holt, N. P. 141.

sea Edwards v. Dillon, 147 111. 14, 35 N. E. 135. And see Matthies
v. Herth, 31 Wash. 665, 72 Pac. 480; Gordon v. Funkhouser, 100 Va.
675; Meyer v. Michaels (Neb.), 95 N. W. 63.

so Berkshire Woolen Co. v. Juillard, 75 N. Y. 535; Mechem's Cases,

LIABILITY ON CONTRACTS. 199

reason of having obtained the benefit of that act.87 Thus, if
a partner, without real or apparent authority, borrows money,
the lender cannot recover this money from the firm, al-
though the money may have been applied for its benefit.88
If, however, the money so borrowed has been expended in pay-
ing the legitimate debts of the firm, or for any other legiti-
mate purpose of the firm, the lender is entitled in equity to
the repayment of so much of the money as he can show to
have been so applied.89 "This doctrine is founded partly on
the right of the lender to stand in equity in the place of those
creditors whose claims have been paid off by his money and
partly on the right of the borrowing partner to be indemni-
fied by the firm against liabilities bona fide incurred by him
for the legitimate purpose of relieving the firm from its debts,
or of carrying on its business."90

319; Mackey v. Bloodgood, 9 Johns. (N. Y.) 285; Witter v. McNiel, 4
111. 433.

sTEmly v. Lye, 15 East, 7, 13 Rev. R. 347; Bevan v. Lewis, 1 Sim.
376, 27 Rev. R. 205; Beckhan v. Drake, 9 Mees. & W. 79; Wittram v.
Van Wormer, 44 111. 525; National Bank of Commerce v. Meader, 40
Minn. 325; Donnally v. Ryan, 41 Pa. 306; Morlitzer v. Bernard, 10
Heisk. (Tenn.) 361; Ex parte Apsey, 3 Brown Cli. 265. But a vol-
tary acceptance of the benefit is a sufficient consideration for a prom-
ise to pay. Siegel v. Chidsey, 28 Pa. 279.

ss National Bank v. Thomas, 47 N. Y. 15; Willis v. Bremner, 60
Wis. 622, 19 N. W. 403; Smith v. Craven, 1 Cromp. & J. 500; Haw-
tayne v. Bourne, 7 Mees. & W. 695. But see Reid v. Rigby [1894],
2 Q. B. 40. A partner is not liable for a loan made to his copartner
before the firm was formed, and by him put into the firm as his in-
dividual property. Brooks-Waterfield Co. v. Carpenter, 21 Ky. L. R.
851, 53 S. W. 40.

so Reid v. Rigby [1894], 2 Q. B. 40; Blackburn Bldg. Sov. v. Cun-
liffe, 22 Ch. Div. 61; Baroness Wenlock v. River Dee Co., 19 Q. B.
Div. 155, 36 Ch. Div. 675, note; Ex parte Chippendale, 4 De Gex,
M. & G. 19.

ooLindl. Partn. p. 191.

ooo AS TO THIRD PERSONS.

Liability for Torts, Frauds,, and Breaches of Trust.

113. A firm is liable for damage caused to third persons, or
for penalties incurred, by the wrongful act of negli-
gence of any partner acting in the ordinary course of
business of the firm, to the same extent as the partner
so acting.

A principal is civilly liable for the tortious or fraudulent
act, whether criminal or not,01 of his agent, not only when he
has previously authorized or subsequently ratified the act,92
but even though he has expressly forbidden it,93 if it has been
committed by the agent in the course and as part of his em-
ployment.94

Upon this principle, a firm is liable for any loss or injury
caused to any person not a member of the firm, or for any pen-
alty incurred by any wrongful act or omission of a partner,
acting in the ordinary course of the business of the firm, or
with the authority of his copartners. The extent of the
firm's liability is the same as that of the partner so acting or
omitting to act95 Thus, all the members of a firm of lawyers

01 Dyer v. Munday [1895], 1 Q. B. 742. A partner cannot be ar-
rested for the fraud of his copartner. McNeely v. Haynes, 76 N. C.
122; Watson v. Hinchman, 42 Mich. 27, 3 N. W. 236.

92 As to the requisites of ratification, see Marsh v. Joseph [1897],
1 Ch. 214; Wilson v. Tumman, 6 Man. & G. 236.

osCollman v. Mills [1897], 1 Q. B. 396.

91 Partners are liable for the negligence of a servant acting in the
course of his employment by the firm. Stables v. Eley, 1 Car. & P.
614; Wood v. L'^comb, 23 Wis. 287.

05 Pollock, Partn. art. 23; Hobbs v. Chicago Packing & Provision
Co., 98 Ga. 576, 25 S. E. 584, Burdick's Cases, 349; Peckham Iron Co.
v. Harper, 41 Ohio St. 100; Robinson v. Goings, 63 Miss. 500; Ash-
worth v. Stanwix, 7 Jur. (N. S.) 467; 3 El. & El. 701; Mellors v.
Shaw, 1 Best & S. 437; Chester v. Dickerson, 54 N. Y. 1, Mechem's
Cases, 20; Lathrop v. Adams, 133 Mass. 471; Stanhope v. Swafford,
80 Iowa, 45, 45 N. W. 403; Attorney-General v. Stranyforth, Bunb. 97,

LIABILITY FOR TORTS, ETC. 201

•or doctors are liable for the negligent advice given by one of
them to a client of the firm, or for any damage caused by neg-
ligence or want of ordinary skill,96 or for the negligent driv-
ing of a partnership coach by one of the firm,97 or for defam-
atory statements made to aid the firm business,98 or for fraud
committed by one of them in the ordinary conduct of their
business, although the others do not participate in the fraud,
and have no knowledge of it ;" and, speaking generally, all
the partners are answerable for the penalties incurred by any

Burdick's Cases, 346; Rolfe v. Dudley, 58 Mich. 208, 24 N. W. 657.
Compare Graham v. Meyer, 4 Blatchf. 129, Fed. Cas. No. 5,673. And
see Ozborn v. Woolworth, 106 Ga. 459, 32 S. E. 581.

aeBlyth v. Fladgate [1891], 1 Ch. 337; Haley v. Case, 142 Mass.
316, 7 N. E. 877; Hess v. Lowrey, 122 Ind. 225, 23 N. E. 156, Mechem's
Cases, 330; Hyrne v. Erwin, 23 S. C. 226; Warner v. Griswold, 8
Wend. (N. Y.) 665.

07 Moreton v. Hardern, 4 Barn. & C. 223. See, also, Champion v.
Bostwick, 18 Wend. (N. Y.) 175.

asHaney Mfg. Co. v. Perkins, 78 Mich. 1, 43 N. W. 1073; Lathrop
v. Adams, 133 Mass. 471. In Georgia, under Civ. Code, § 2658, an
action for slander will not lie against a partnership. Ozborn v.
Woolworth, 106 Ga. 459, 32 S. E. 581.

99 Wolf v. Mills, 56 111. 360; Tenney v. Foote, 95 111. 99; Banner v.
Schlessinger, 109 Mich. 262, 67 N. W. 116; Locke v. Stearns, 1 Mete.
(Mass.) 560; Castle v. Bullard, 23 How. (U. S.) 173; Brundage v.
Mellon, 5 N. D. 72, 63 N. W. 209; Chester v. Dickerson, 54 N. Y. 1,
Mechem's Cases, 20; Walker v. Anglo-American Mortgage & Trust
Co., 72 Hun (N. Y.) 334; Gill v. First Nat. Bank (Tex. Civ. A^p.)
47 S. W. 751; Brydges v. Branfill, 12 Sim. 369. And compare Marsh
v. Joseph [1897], 1 Ch. 214. But where a partner, by fraudulent rep-
resentations, induces a stranger to purchase the interest of his co-
partners, the copartners are not liable for such representations un-
less they instigate or approve of them, or the partner making such
representations acts as their agent in making them. Schwabacker v.
Riddle, 84 111. 517. By 9 Geo. IV, c. 14, § 6, a firm is not liable for
the false and fraudulent representation as to the character or solv-
ency of any person, unless the representation is in writing, signed
by all the partners — signature by one partner in the name of the
firm is not sufficient. Swift v. Jewsbury, L. R. 9 Q. B. 301.

202 A^ T0 THIRD PERSONS.

breach of a statute, e. g., of the revenue laws.100 or of the
poor law,101 committed by one partner in conducting the
partnership business.

On the other hand, the firm will not be liable for the will-
ful or negligent tort of a partner outside the scope of his au-
thority, though to some extenl connected with the business of
the firm.102 Thus a firm lias been held not liable for the
malicious prosecution and false imprisonment by one partner
of a person for stealing partnership property.103 Of course
the other partners may become liable if they subsequently
adopt the wrongful act, and receive the benefit of it.104

Misapplication of Money or Property Received for or in Cus-
tody of Finn.
With regard to the liability of a firm for the misapplic-
ation of money or property by one of its members, the rule is
that (a) where one partner, acting with the scope of his ap-.
parent authority, receives the money or property of a third

100 Attorney-General v. Stranyforth, Bunb. 97, Burdick's Cases,
346; Stockwell v. U. S., 13 Wall. (U. S.) 531.

ioi Davies v. Harvey, L. R. 9 Q. B. 433.

lo-JTitcomb v. James, 57 111. App. 296; Gwynn v. Duffield, 66 Iowa,
708, 24 N. W. 523; Woodling v. Knickerbocker, 31 Minn. 268, 17 N.
W. 479; Einstman v. Black, 14 111. App. 381; Grund v. Van Vleck, 69
111. 478.

losArbuckle v. Taylor, 3 Dow, 160; Rosenkranz v. Barker, 115 111.
331, 3 N. E. 93, Mechem's Cases, 335; Kirk v. Garrett, 84 Md. 383,
25 Atl. 1089; Farrell v. Friedlander, 63 Hun, 254, 18 N. Y. Supp. 215;
Marks v. Hastings, 101 Ala. 165, 13 So. 297.

104 Durant v. Rogers, 87 111. 508. A subsequent approval will not
render a partner liable for a trespass by his copartner unless it was
in the nature of a taking available to the firm. Grund v. Van Vleck,
69 111. 478.

A partnership is liable as such in an action for malicious prose-
cution, or for malicious arrest, where the suit was instituted, or the
process sued out, in furtherance of the partnership interests, and
by direct authority of its members. Page v. Citizens' Banking Co.,
Ill Ga. 73, 51 L. R. A. 463.

LIABILITY FOR TORTS, ETC. 203

person^and : misapplies it; and_(b) when a firm, jn the course
of its business, receives money or property of a third person,
and the money or property so received is misapplied by one
or more of the partners while it is in the custody of the firm,

..- . . ......

-the firm is liable to make good the loss.

In the cases falling under the first branch (a) of the ride,
the money is received by the partner as the real or ostensible
agent of the firm, and the firm is therefore, in accordance
with the principles above explained, treated as having re-
ceived it, and is responsible for its proper application. If,
however, money has been received by a partner acting outside
the scope of his real and apparent authority, the receipt
thereof by the partner is not a receipt by the firm, and the
firm will not, without more, be liable for the misapplication
of the money by the partner who did receive it.105 Thus it is
within the ordinary course of the business of solicitors to re-
ceive money from clients for investment on a specific security,
but it is not within the ordinary course of such business to
receive money for investment generally. If, therefore, a
member of a firm of solicitors misapplies money intrusted to
him by a client for investment in a particular mortgage, his
partners, however innocent, are liable for such misapplication,.
but, in the absence of special circumstances, they are not lia-
ble if the money was received by him for investment gen-
erally.106

In order to bring a case within the second branch (b) of
the rule, the money must have been received by the firm in

105 willet v. Chambers, Copp. 814; Whitaker v. Brown, 16 Wend.
(N. Y.) 504; Ex parte Eyre, 1 Phil. 227; Adams v. Sturges, 55 111.
468; Palmer v. Scott, 68 Ala. 380; Guillou v. Peterson, 89 Pa. 163;
Welker v. Wallace, 31 Ga. 362; Todd v. Jackson, 75 Ind. 272.

ioo Harman v. Johnson, 2 El. & Bl. 61. See, too, Plumer v. Gregory,
L. R. 18 Eq. 621. The distinction in question is also illustrated by
the two cases of Cleather v. Twisden, 28 Ch. Div. 340, and Rhodes
v. Moules [1895], 1 Ch. 236.

2( i | AS TO THIRD PERSONS.

the course of its business, and have been misapplied while
still in the custody of the firm.107

Employment of Trust Money for Partnership Purposes.

In order to iix the other partners with liability for a breach
of trust by one partner, notice of the breach of trust must be
brought home to them individually; for, as a general rule in
such eases, the money would not have come into the custody
of the tin 11 in the course of its business, and the knowledge
of one partner would net affect the others, for the fact to bo
known would have nothing I" do with the business of the
firm. It is not within the scope of the implied authority of
a partner to constitute himself a constructive trustee, and
thereby subject his partners to liability in that character.108
It is not sufficient, in order to fix innocent partners with lia-
bility for the misapplication of money belonging to a third
party, merely to show that such moneys came into the custody
of the firm.109 But partners who are implicated in a breach

i"; Thus, in Moore v. Knight [1891], 1 Ch. 547, a firm of solicitors
received from a client certain moneys for investment. The money
was not invested but embezzled. The firm for many years rendered
accounts to their client of the interest due to her in such form as to
represent that the money had been invested, and paid her the inter-
est. Under these circumstances, the estate of a deceased partner,
who was not party or privy to the fraud, was held liable to repay
the money with interest. See, also, Blair v. Bromley, 2 Phil. 354;
Devaynes v. Noble, 1 Merivale, 611, 15 Rev. R. 169; Clayton's Case. 1
Merivale, 572, 15 Rev. R. 161; Bishop v. Countess of Jersey, 2 Drew.
143.

los Bienenstok v. Ammidown, 155 N. Y. 47, 49 N. B. 321; Mara v.
Browne [1896], 1 Ch. 199; Gilruth v. Decell, 72 Miss. 232, Burdick's
Cases, 351; Bignold v. Waterhouse, 1 Maule & S. 255. See, also,
cases cited in following note.

i°o Toof v. Duncan, 45 Miss. 48; Dounce v. Parsons, 45 N. Y. 180;
Bienenstok v. Ammidown, 155 N. Y. 47, 49 N. E. 321; Guillou v.
Peterson, 89 Pa. 163; Englar v. Offutt, 70 Md. 78, 16 Atl. 497,
Mechem's Cases, 328; Ex parte Apsey, 3 Brown Ch. 265; Shaffer v.

LIABILITY FOR CRIMES. 205

of trust will be liable, though they may not have employed
the trust moneys in the partnership business.110 The con-
sideration of the circumstances under which persons who are
not trustees may be liable for a breach of trust, and under
which trust funds may be followed and recovered from the
persons in whose hands the funds are, belongs to the law of
trusts, and the reader is referred to the standard authorities
on that subject.111

Liability foe Crimes.

113a. A partner is not by reason of the existence of the part-
nersHip relation answerable criminally for the acts of
his copartners.

Partners are agents of each other in respect of firm affairs
and their criminal liability for each other's crimes depends
on the principles applicable to the law of agency. llla The
ramifications of the subject extend beyond the scope of the
present work but it may be stated as a general rule that a part-
ner is liable only for those crimes of his copartner which he
expressly or impliedly authorizes, and the existence of the
partnership relation is not an implied authorization to com-
mit crimes for the benefit of the firm, nor does ratification re-
late back to make the ratifying partner criminally liable.1110

Martin, 25 App. Div. 501, 49 N. Y. Supp. 853; Gilruth v. Decell, 72
Miss. 232, 16 So. 250, Burdick's Cases, 351.

noBlyth v. Fladgate [1891], 1 Ch. 354.

in But see, generally, Randall v. Knevals, 27 App. Div. 146, 50
N. Y. Supp. 748.

ma Robinson v. State, 38 Ark. 641; Whitton v. State, 37 Miss. 379.

mb See Clark & M. Crimes, 395; Clark & S. Agency, 1138-1142.
And see United States v. Conn, 128 Fed. 615.

206 A» TO THIRD PERSONS.

Nature of Liability.

114. The liability of partners upon firm contracts is joint,
and not joint and several, except —

Exception —

(a) Where the contract expressly imposes a joint and

several liability, jancT

(b) Where statutes exist changing joint contracts into_

^joint and several contracts.

115. The liability of gartners for tort^and breaches qf jr,pist

is joint and several, except —

Exception — The liability of partners in respect to the own-_
ership of land is joints

In the absence of special circumstances, the liability of
partners for the debts and obligations of their firm arising ex
contractu is joint, and not joint and several.112 A partner
may, however, render himself separately liable by holding
himself out to the creditor as the only member of the firm,113
or by the terms of the contract into which he has entered.114

Statutory Changes.

In a number of states, statutes have been enacted declaring,
in effect, that all contracts joint by the common law should be

112 Dob v. Halsey, 16 Johns. (N. Y.) 34; Marvin v. Wilber, 52 N.
Y. 270; Brown v. Fitch, 33 N. J. Law, 418; Curtis v. Hollingshead,
16 N. J. Law, 402; Crosby v Jeroloman, 37 Ind. 264; Page v. Brant,
18 111. 37; Slutts v. Chafee, 48 Wis. 617, 4 N. W. 763; Mason v. El-
dred, 6 Wall. (U. S.) 231, Burdick's Cases, 343; Cox v. Gille Hard-
ware & Iron Co., 8 Okl. 483, 58 Pac. 645; Hyde v. Casey-Grimshaw
Marble Co., 82 111. App. 83; Kendall v. Hamilton, 4 App. Cas. 504.

us Bonfield v. Smith, 12 Mees. & W. 405. See, also, Scarf v. Jar-
dine, 7 App. Cas. 345.

i« Ex parte Harding, 12 Ch. Div. 557.

EXTENT OF LIABILITY. 207

deemed joint and several. These statutes have been generally
held applicable to partnership contracts,115 though in a few
states it has been held that the liability of partners is joint,
notwithstanding such statutes.116

Torts and Breach of Trust.

The liability of partners for loss occasioned by any wrong-
ful act or omission, or for the misapplication of. money or
property for which the firm is liable, is joint and several,117
as is also their liability for any breach of trust imputable to
the firm.118 "To this general rule, an exception occurs
where an action ex delicto is brought against several persons
in respect of their ownership in land, for then they are liable
jointly, and not jointly and severally." 119

Extent of Liability.

116. Each partner is personally liable for the entire amount,
ofTfl^artnerehjpobj^

Exception — In some states, by statute, partnership associa-
tions may be formed in which the liability of some
or all of the partners is limited.

Each individual partner is liable to creditors of the firm
for the whole amount of every debt due therefrom, without
reference to the proportion of his interest, or to the nature of

us Williams v. Muthersbaugh, 29 Kan. 730; Hall v. Cook, 69 Ala.
8'< ; Putnam v. Ross, 55 Mo. 116.

noCoates v. Preston, 105 111. 470; Hyde v. Casey-Grimshaw Marble
Co., 82 111. App. 83; Currey v. Warrington, 5 Har. (Del.) 147.

ii" Linton v. Hurley, 14 Gray (Mass.) 191; Roberts v. Johnson,
58 N. Y. 613; Wood v. Luscomb, 23 Wis. 287; Howe v. Shaw, 56 Me.
291; Rosenkrans v. Barker, 115 111. 331, 3 N. E. 93, Mechem's Cases,
235; Stockton v. Frey, 4 Gill (Md.) 406; In re Blackford, 35 App.
Div. 330, 54 N. Y. Supp. 972; Walker v. Anglo-American Mortgage &
Trust Co., 72 Hun, 334, 25 N. Y. Supp. 432.

nsBlyth v. Fladgate [1891], 1 Ch. 353; In re Jordan, 2 Fed. 319.

no Lindl. Partn. p. 198, citing 1 Wm. Saund. 291f, 291g.

208 AS TO THIRD PERSONS.

the stipulation between him and his associates.120 This rule
is equally applicable to obligations arising out of torts.121
"The law, ignoring the firm as anything distinct from the
members composing if, treats the debts and engagements of
the firm as the debts and engagements ofthe^ partners, and
holds each partner liable tor tnein^accordingiv." 122 This
liability is, however, only a liability insolido upon the judg-
ment, and one partner cannot ordinarily be sued alone upon
a firm debt.122a

Execution against Individual Properly.

Tn the absence of statutory provision to the contrary, "if
judgment is obtained against the firm for a debt owing by it,
the judgment creditor is under no obligation to levy execution
against the property of the firm before having recourse to the
separate property of the partners nor is he under any obliga-
tion to levy execution against all of the partners ratably ; but
he may select any one or more of them,- and levy execution
upon him or them until the judgment is satisfied, leaving all
questions of contribution to be settled afterwards between the
partners themselves." 123

120 Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 837; Brooke v.
Washington, 8 Grat. (Va.) 248, 56 Am. Dec. 142; Judd Oil Co. v. Hub-
bell, 76 N. Y. 543, Mechem's Cases, 341. In Louisiana, it is only in
the case of commercial partnerships that each partner is subject to-
this entire liability. See Gumbel v. Abrams, 20 La. Ann. 569; Payne
v. James, 36 La. Ann. 476.

121 Loomis v. Barker, 69 111. 360.

i22Lindl. Partn. p. 200.

122a See post, § 136 et seq.

123 Stout v. Baker, 32 Kan. 113, 4 Pac. 141; Saunders v. Reilly, 105
N. Y. 12, 12 N. E. 170, Burdick's Cases, 277; Leinkauff v. Munter, 76
Ala. 194; Clayton v. May, 68 Ga. 27; Hamsmith v. Espy, 13 Iowa, 439,
Burdick's Cases, 376; Stevens v. Perry, 113 Mass. 380, Burdick's
Cases, 377. Compare Jaffray v. Jennings, 101 Mich. 515, 60 N. W.
52, Burdick's Cases, 378.

COMMENCEMENT OF LIABILITY. 209

Stipulations Limiting Liability.

In the absence of statute, the only effectual way of limiting
the liability of a partner is to stipulate with each creditor
that he shall be paid only out of the funds of the partnership,
and that he shall not be entitled to require the individual
partners to pay more than a certain amount.124 Certainly a
limitation contained in the articles of association would not
bind a creditor who had no notice of such limitation at the
time the indebtedness was incurred,125 and it is at least doubt-
ful whether a stiplation between partners limiting the liability
of one of them for losses would affect even a creditor with
notice, for such a stipulation is quite consistent with an in-
tention that all of the partners should be primarily bound to
third persons, but that, as between themselves some of them
should indemnify the others in case of loss.126

Limited Partnership and Joint-Stock Companies.

Iri several jurisdictions, statutes exist under which a species
of partnership, known as a "limited partnership," may be
formed, in which the liability of some of the members is lim-
ited to a definite sum. So, also, the liability of members of
joint-stock companies is sometimes limited by statute. These
subjects will be treated separately in subsequent chapters.127

Commencement of Liability.

A partner is not liable for the debts and obligations in-
curred by his copartners before the partnership be- ,
tween him and them was formed, except —

Exception — Where he expressly assumes liability.

i2*Lindl. Partn. p. 201.

125 Ellison v. Stuart, 2 Pen. (Del.) 179, 43 Atl. 837.

128 See Everitt v. Chapman, 6 Conn. 347.

12~ See post, cc. 12 and 13.

14

210 AS TO THIRD PERSONS.

The agency of a partner, to bind his firm and his copartners,
commences only with the commencement of the partnership.
A person, therefore, who enters into partnership with another,
or joins an existing firm, does not thereby become liable to the
creditors of his partner or of the firm for anything done be-
fore he became a partner.128 The point of time when a part-
nership begins must be determined upon principles already
discussed.129 An incoming partner will, however, be liable
for new debts arising after he has joined the firm, under a
continuing contract entered into with the firm before that
time.130 So, where there is a partnership in the performance
of a single contract, a new member cannot identify himself
with the firm, and buy into the partnership contract, without
making himself liable for the obligations of that contract.131

Assumption of Debts.

Where an incoming partner or the new firm formed by his
entrance, agrees with the old firm to assume some or all of its
debts, the cases are in considerable conflict as to whether or
not the creditors of the old firm acquire any rights under the

128 Saville v. Robert, 4 Term R. 720; Gabriel v. Evill, 9 Mees. &
W. 297; Heap v. Dobson, 15 C. B. (N. S.) 460; Valentine v. Hickle,
39 Ohio St. 19; Heckert v. Fegely, 6 Watts & S. (Pa.) 139; Wilson v.
Whitehead, 10 Mees. & W. 503; Corner v. Mackey, 147 N. Y. 574, 42
N. E. 29; Sizer v. Ray, 87 N. Y. 220; Guild v. Belcher, 119 Mass. 257;
Hoyt v. Hasse, 80 111. App. 187; Penn v. Fogler, 182 111. 76, 55 N. E.
192; Salter v. Edward Hines Lumber Co., 77 111. App. 97; Nix v.
First Nat. Bank, 23 Colo. 511, 48 Pac. 522; Rohlfing v. Carper, 53
Kan. 251, 36 Pac. 336; Wolff v. Madden, 6 Wash. 514, 33 Pac. 975;
Bank of Scott City v. Sandusky, 51 Mo. App. 398.

129 See chapter 1, and specially section 24.

iso Dyke v. Brewer, 2 Car. & K. 828. An incoming partner is not
liable on a written agreement of employment for more than a year,
made before his entry into the firm, and signed in the firm name
only. Hughes v. Gross, 166 Mass. 61, 43 N. E. 1031, Burdick's Cases,
296.

i3i Jones v. Davies, 60 Kan. 309, 56 Pac. 484.

COMMENCEMENT OF LIABILITY. 211

agreement. Of course, as between the parties to the contract,
it is binding, and may be enforced.

In some jurisdictions, the doctrine prevails that a person
not a party to a contract cannot sue upon it, although it was
made for his benefit. In such jurisdictions, an assumption
of the debts of the old firm by the new firm gives the creditor
no rights against the new firm.132 Under this doctrine, to
give the creditors any right in the premises, there must bo
some agreement to that effect between the new partners and
creditors.133 The court appears to imply such an agreement
somewhat readily if there is any evidence to support it.134

In other jurisdictions the doctrine prevails that a person
for whose benefit a contract has been made may sue upon it,
though not himself a party thereto. Under this doctrine, a
creditor of the old firm who can show that his debt was one
of those included in the assumption of debts may recover
against the new firm.135 But when the agreement assuming
debts is in such form that no particular creditor can show
that it was made for his benefit, as where the agreement was
simply to pay a certain proportion of the debts of the old firm,
without specifying any particular debts, no creditor can sue
upon it, but it must be enforced, if at all, by the parties with
whom it was made.136

i32Lindl. Partn. p. 208; Shoemaker Piano Mfg. Co. v. Bernard, 2
Lea (Tenn.) 358; Parmalee v. Wiggenhorn, 6 Neb. 322; Vere v.
Ashby, 10 Barn. & C. 288.

133 Rolfe v. Flower, L. R. 1 P. C. 27.

i34Rolfe v. Flower, L. R. 1 P. C. 27; Ex parte Jackson, 1 Ves. Jr.
131, 1 Rev. R. 91; Ex parte Williams, Buck, 13; Jones v. Davies, 60
Kan. 309, 56 Pac. 484. A promise to assume liability may be inferred
from the conduct of an incoming partner. Salter v. Edward Hines
Lumber Co., 77 111. App. 97.

135 Arnold v. Nichols, 64 N. Y. 117.

136 Wheat v. Rice, 97 N. Y. 296; Serviss v. McDonnell, 107 N. Y.
260, 14 N. E. 314.

212 AS TO THIRD PERSONS.

The assumption of indebtedness by an incoming partner

is nut within the statute of frauds and nerd qo1 be in writ-
ing. 1,iCa

Termination or Liability.

118. In order to determine the events whicl^put an end *
to a partner's liability to creditors, it is necessary to ~ \
distinguish his liability for the future from his liability _
for the past.

Same — Foe Futuee Acts.

119. A partner's liability for the acts of his copartners
ceases upon his retirement from the firm, or its disso-
lution, except —

Exception — In most cases, notice of retirement is neces-
sary to terminate liability.

As a general rule, a partner is not liable for the acts of his
former partners after the dissolution of his firm, or his re-
tirement from it, and due notification, when necessary, of the
fact,1::T for the agency of the partners for each other is thereby
terminated. If, however, the retiring partner holds himself
ou1 as being still a partner, or allows others to do so, he is
liable upon principles already explained.138 So, notwith-
standing a dissolution, all the partners remain liable for acts
of their former copartner necessary to complete transactions

i^aBarlett v. Smith (Neb), 98 N. W. 687.

''•"Ex parte Central Bank of London [1892], 2 Q. B. 633; Abel v.
Sutton, 3 Esp. 108, 6 Rev. R. 818; Minnit v. Whinery, 5 Bro. P. C.
489; Monroe v. Conner, 15 Me. 178; Yeager v. Wallace, 57 Pa. 365;
Askew v. Silman, 95 Ga. 678, 22 S. E. 573; Burdick's Cases, 106;
Ooodspeed v. South Bend Chilled Plow Co., 45 Mich. 237, 7 N. W.
810; Matteson v. Nathanson, 38 Mich. 377.

188 See ante, §§ 35-37. See, also, Speer v. Bishop, 24 Ohio St. 598;
Richards v. Hunt, 65 Ga. 342; Ellis' Adm'r v. Bronson, 40 111. 455.

TERMINATION OF LIABILITY. 213

begun, but not finished at the time of the dissolution.139 Any
partner may give notice of the dissolution of the firm, or of
his retirement therefrom, and may require his copartners
to concur, for that purpose, in all necessary or proper acts
which cannot be done without their concurrence.140

Same — Xotice of Dissolution.

120. Notice of dissolution or retirement is necessary in all

cases to terminate liability for future acts of the other

partners, except —

Exceptions — Notice is not necessary to terminate liability
in the following cases, ^dz. :

(a) Where the dissolution was by operation of law.

1 ■ ' ii 1 1 ■"■■■•'■ ' ""

(b) In the case of unknown, dormant and secret partners.

LrfS

(c) In the case of torts. <}' y.

121. Where notice is necessary, former customers of the _

firm are entitled to actual notice, but notice by publi-
cation is sufficient as to all others.

Speaking generally, a person who deals with an agent, and
knows that he has authority to act for his principal, is entitled
to assume the continuance of that authority until ho has no-
tice of its revocation, unless such revocation is caused by the

i'">Thursby v. Lidgerwood, 69 N. Y. 198; Rust v. Chisolm, 57 Md.
376; Merrill v. Blanchard, 7 App. Div. (N. Y.) 167. Compare Brisban
v. Boyd, 4 Paige (N. Y.) 17; Moore v. Duckett, 91 Ga. 752, 17 S. E.
1037. In Court v. Berlin [1897], 2 Q. B. 396, a solicitor, retained by
by a firm to bring an action for the recovery of a partnership debt, re-
covered from retired partners costs incurred after their retirement,
for the liability was really incurred before their retirement, namely,
when the solicitor was retained. Compare the converse case, Dyke v.
Brewer, 2 Car. & K. 828.

ii" English Partnership Act 1890, § 37; Hendry v. Turner, 32 Ch.
Div. 355; Troughton v. Hunter, 18 Beav. 470.

I M

21-t AS TO THIRD PERSONS.

death of the principal.141 Consequently, with the exceptions
hereafter mentioned, ;i partner, in order to terminate his lia-
bility for the future acts of his partners, must not only cease
to be a partner, bul must also give due notice of this fact.142
If a secret dissolution were binding upon third persons, the
partners would be in a position to defraud them, and no one
could safely deal with a partnership in the way business is
usually carried on.

Dissolution by Operation of Law.

Where a partnership is dissolved by operation of law, no
notice of dissolution is necessary to terminate liability for
future acts.143 The reason assigned for this rule is that dis-
solution by operation of law is of a public and not of a pri-
vate nature, and is presumed to be taken notice of by every
one.144 As will be seen in the following chapter, a partner-
ship is dissolved by operation of law upon the death or bank-
ruptcy of a partner, or upon the breaking out of war between
the countries in which the partners respectively reside.

Dormant and Secret Partners.

JJnknown, ^dormant and jjeqret partners need not ^'ye. no-
tice of retirement in order to terminate their liability.1"15

i« Blades v. Free, 9 Barn. & C. 167.

142 Arnold v. Hart, 176 111. 442, 52 N. B. 936; Morrill v. Bissell, 99
Mich. 409, 58 N. W. 324; Austin v. Holland, 69 N. Y. 571, Mechem's
Cases, 370; Howell v. Adams, 68 N. Y. 314; Woodruff v. King, 47
Wis. 261, 2 N. W. 252; Southern v. Grim, 67 111. 106; Parker v. Can-
field, 37 Conn. 250, 9 Am. Rep. 317; Burgan v. Lyell, 2 Mich. 102,
Burdick's Cases, 312, 55 Am. Rep. 53; Clement v. Clement, 69 Wis.
599, 35 N. W. 17, 2 Am. St. Rep. 760.

143 Bank of New Orleans v. Matthews, 49 N. Y. 12; Lyon v. John-
son, 28 Conn. 1; Dickinson v. Dickinson, 25 Grat. (Va.) 321; Gris-
wold v. Waddington, 16 Johns. (N. Y.) 438.

144 Bates, Partn. § 610; Mechem, Partn. § 260; Eustis v. Bolles,
146 Mass. 413, 16 N. E. 286.

145 Nussbaumer v. Becker, 87 111. 281; Pitkin v. Benfer, 50 Kan.

TERMINATION OF LIABILITY. 215

"When a dormant partner ceases to be a member of the firm,
the real authority of his copartners to bind him is thereby
withdrawn, and as ex hypothesi no one knows of the authority,
no one is entitled to rely upon its continuance.146 If, how-
ever, a person not generally known to have been a partner is
known to certain individuals to have been a partner, he is not
a dormant partner as to them, and notice of his retirement
must be given to them.147

Torts.

It would seem that a failure to give notice of retirement
will not render the retiring partner liable for torts committed
subsequently to his retirement by his late copartners or their
agents, as in such case there is no reliance upon his continued
presence in the firm.148

108, 31 Pac. 695, Mechem's Cases, 313; Elmira Iron, etc. Co. v. Har-
ris, 124 N. Y. 280, 26 N. E. 541, Burdick's Cases, 398; Howell v.
Adams, 68 N. Y. 314; Warren v. Ball, 37 111. 81; Vaccaro v. Toof, 9
Heisk. (Tenn.) 194; Gilchrist v. Brande, 58 Wis. 184, 15 N. W. 817;
Cxorman v. Davis & Gregory Co., 118 N. C. 370, 24 S. E. 770.

no Carter v. Whalley, 1 Barn. & Adol. 14; Heath v. Sansom, 4 Barn.
& Adol. 172. If one is not in fact a dormant partner, the mere fact
that he was not known to be a partner does not relieve him of the
necessity of giving notice of retirement. Bouker Contracting Co. v.
Scribner, 52 App. Div. 505, 65 N. Y. Supp. 444.

lirFarrar v. Deflinne, 1 Car. & K. 580; Nussbaumer v. Becker, 87
111. 281; Ellis' Adm'rs v. Bronson, 40 111. 455; Kelley v. Hurlburt, 5
Cow. (N. Y.) 534; Southwick v. McGovern, 28 Iowa, 533; Benjamin
v. Covert, 47 Wis. 375, 2 N. W. 625; Brown v. Foster, 41 S. C. 118, 19
S. E. 299.

1*8 Shapard v. Haynes, 104 Fed. 449, 52 L. R. A. 675; Lindl. Partn.
p. 215. In Stables v. Eley, 1 Car. & P. 614, a retired partner was held
liable in tort upon the ground of holding out; but this case has been
pronounced unsound in principle by eminent authority. See Lindl.
Fartn. p. 315, note; Pollock, Partn. (3d Ed.) p. 25. See, also, ante,
5§ 35-37. A quasi-partner is liable for torts founded upon contract.
Sherrod v. Langdon, 21 Iowa, 518, Burdick's Cases, 112; Maxwell v.
Gibbs, 32 Iowa, 32.

216 AS TO THIRD PERSONS.

Sufficiency of Notice.

All persons who liave bad dealings with the firm before its
dissolution are entitled to have actual notice; .Mere j » t 1 1 > 1 1 < - ; i -
tion in a newspaper i-^ nol sufficient. Bui if, in anv case,
actual notice can be shown, it i- immaterial how it is given-148

A- in persons who have had no dealings with the linn prior
to it< dissolution, fair notice in anv public and notorious man-
ner i- sufficient Notice by publication in a newspaper cir-
culated in the locality in which tin1 business of the partner-
ship lias been conducted is the usual and best method of giv-
ing such general notice.150

«9 Graham v. Hope, Peake, 208, 3 Rev. R. 671; Rooth v. Quin, 7
Price, 193, 21 Rev. R. 744; Barfoot v. Goodall, 3 Camp. 147; Bouker
Contracting Co. v. Scribner, 52 App. Div. 505, 65 N. Y. Supp. 444;
Austin v. Holland, 69 N. Y. 571, Mechem's Cases, 370; Howell v.
Adams, 68 N. Y. 314; National Shoe and Leather Bank v. Herz, 89
N. Y. 629; Elmira Iron & Steel Rolling-Mill Co. v. Harris, 124 N. Y.
280, 26 N. E. 541, Burdick's Cases, 398; Meyer v. Krohn, 144 111. 574,
2 N. E. 495; Robinson v. Floyd, 159 Pa. 165, 28 Atl. 258; Haynes v.
Carter, 12 Heisk. (Tenn.) 7; Potter v. Tolbert, 113 Mich. 486, 71 N.
W. 849; Gathright v. Burke, 101 Ind. 590; Rose v. Coffield, 53 Md. 18;
Vernon v. Manhattan Co., 22 Wend. (N. Y.) 183; Clapp v. Rogers,
12 N. Y. 283; City Bank v. MeChesney, 20 N. Y. 240. Declarations of
the remaining partner to neighbors are no evidence of actual notice
of dissolution to a creditor living 500 miles away. Gage v. Rogers,
51 Mo. App. 428. Actual notice of the dissolution may be inferred by
the jury from the remaining partner's testimony that at once, after
the dissolution, she notified the commercial agencies, which dis-
tributed the information by its daily slips to subscribers, among
whom was the creditor, and that such slips were daily examined by
the latter's credit man. Gage v. Rogers, 51 Mo. App. 428. Notice
to plaintiff's traveling salesman that defendant had withdrawn from
the firm to which the salesman sold goods for plaintiff was notice to
plaintiff, so as to relieve defendant from liability for the price of the
goods sold. Ach v. Barnes, 21 Ky. L. R. 893, 53 S. W. 293; Cowan v.
Roberts, 133 N. C. 629, 45 S. E. 954. A statement to a clerk by a per-
son buying for a firm that he thought one of the partners had sold
out is not notice to the employer of the clerk. Brown v. Foster, 41
S. C. 118, 19 S. E. 299. Notice to a bookkeeper is ordinarily insuffi-
cient. Cowan v. Roberts, supra.

iso Askew v. Silman, 95 Ga. 678, 22 S. E. 573, Burdick's Cases, 106;

TERMINATION OF LIABILITY. 217

Same — For Pasi Acts.

122. The liability of partners for past obligations of flip. -
firm continues after retirement or dissolution, and un-
til such obligations are discharged by —

(a) Payment.

(b) Release.

(c) Novation.

(d) Merger by judgment.

(e) Bankruptcy.

(f) Limitation.

With regard to a partner's liability for past acts, a partner
who retires from a firm docs not thereby cease to be liable for
the partnership debts and obligations incurred before bis re-
tirement. Nor will death release the estate of a deceased
partner from liabilies incurred during his life. It is neces-
sary, therefore, to consider shortly the more important ways
by which a partner or the estate of a deceased partner may
be freed from such liability.

Payment.

An obligation, whether it be joint or joint and several, is
di-i'lur^vd if performed by any one of the person- obliged ;ir"
therefore payment of partnership debt by any one partner
will discharge all the rest,152 unless, indeed, the partner who
pays the debl pays it out of his own moneys, and in such a
way as to show his intention to keep the debt alive as against
the firm,153 though it would seem that, even in that case, the

Lovejoy v. Spafford, 93 U. S. 430; Ellison v. Sexton, 105 N. C. 356,
11 S. E. 180.

i"i See Beaumont v. Greathead, 2 C. B. 494.

'■-LePage v. McCrea, 1 Wend. (N. Y.) 164; Booth v. Farmers' &
Mechanics' Nat. Bank, 74 N. Y. 228; Hinton v. Odenheimer, 4 Jones
Eq. (N. C.) 406; Hogan v. Reynolds, 21 Ala. 56.

'■" ••■•• Lindl. Partn. p. 225 et seq; Mclntyre v. Miller. 13 Mees. & W.
725; Sells v. Hubbell's Adm'rs, 2 Johns. Ch. (N. Y.) 394.

218 AS TO THIRD PERSONS.

liability would be extinguished, and the payment would con-
stitute a mere item in the partnership account.154

In considering discharge by payment, attention must be-
paid to the genera] rules relating to the appropriation of pay-
ments,15-"' ;ind especially !<> the rule in (dayton's Case,150
which is that, where (here i- one single open current ac-
count157 between two parties^ every payment which cannot be
shown to have been made in discharge of some particular item
is imputed to the earliest item standing, to the debt of the
payer at the time of payment. The application of this rule

Jl^di—M »»i i » n Tin n i i run 1m iiMi— — O0 J- i-

Avill discharge from liability the estate of a deceased part-
ner,158 and a retired partner, whether known159 or dor-
mant.100 This rule, like the other rules relating to the ap-
propriation of payments, is not a rigid rule of law, but de-
pends upon the intention of the parties, expressed, implied or

15* Bates, Partn. § 531, citing Bartlett v. McRae, 4 Ala. 688.

155 As to the general rule for the application of payments, see
Pates, Partn. § 489; Lindl. Partn. p. 226. Partnership cases on appli-
cation of payments. Miles v. Ogden, 54 Wis. 573, 12 N. W. 81; Witt-
kowsky v. Ried, 82 N. C. 116; Brown's Ex'rs v. Brabham, 3 Ohio,
275; Logan v. Mason, 6 Watts & S. (Pa.) 9; Youmans v. Heartt, 34
Mich. 397.

i5c General authorities on rule in Clayton's Case; Clayton's Case,

1 Merivale, 572, 15 Rev. R. 161; Morgan v. Tarbell, 28 Vt. 498; Starr
v. Case, 59 Iowa, 491; Jones v. Maund, 3 Younge & C. 347; Taylor v.
Post, 30 Hun (N. Y.) 446; Simson v. Ingham, 2 Barn. & C. 65; Burns
v. Pillsbury, 17 N. H. 66; Botsford v. Kleinhans, 29 Mich. 332;
Hooper v. Keay, 1 Q. B. Div. 178; Brooke v. Enderby, 2 Brod. & B.
70, 22 Rev. R. 653; Newmarch v. Clay, 14 East, 329; Beale v. Caddick,

2 Hurl. & N. 326, Burland v. Nash, 2 Fost. & F. 687.

is: Cory Bros. & Co. v. Owners of the Mecca [1897], App. Cas. 286.

158 Clayton's Case, 1 Merivale, 572, 15 Rev. R. 161.

159 Hooper v. Keay, 1 Q. B. Div. 178; Allcott v. Strong, 9 Cush.
(Mass.) 323; Baker v. Stackpole, 9 Cow. (N. Y.) 420, 18 Am. Dec.
508.

ico Brooke v. Enderby, 2 Brod. & B. 70, 22 Rev. R. 653; Newmarch
v. Clay, 14 East, 239.

TERMINATION OF LIABILITY. 219

presumed,101 consequently it will not be applied against a
creditor in respect of a fraud committed on him, of which he
is ignorant.162

A payment out of partnership funds must be applied to the
partnership debt, and not to the individual debt of the part-
ner making the payment.163

Release.

When several persons are bound jointly or "jointly and sev-
erally, a release of one is a release of them all ; hence, a re-
lease of one partner from a partnership liability, whether it
arises from nrmflraftt or tor^. discharges all the others.164 But
a covenant not to sue one partner has not this effect,165 and a
release so drawn as to show that it is intended to inure only
for the benefit of the releasee personally is equivalent to a
covenant not to sue.160 If, however, the debt be in fact re-
leased, any attempt to reserve a right of action against other

i6i Cory Bros. & Co. v. Owners of the Mecca [1897], App. Cas. 286;
In re Hallett's Estate, 13 Ch. Div. 696.

162 Clayton's Case, 1 Merivale, 572, 15 Rev. R. 161; Lacey v. Hill, 4
Ch. Div. 537, affirmed sub nom. Read v. Bailey, 3 App. Cas. 94. See,
too, Wlckham v. Wickham, 2 Kay & J. 478.

163 Bates, Partn. § 493.

i':* Bower v. Swadlin, 1 Atk. 294; Cheetham v. Ward, 1 Bos. & P.
630, 4 Rev. R. 741; Duck v. Mayeu [1892], 2 Q. B. 511; Elliott v.
Holbrook, 33 Ala. 659; Le Page v. McCrea, 1 Wend. (N. Y.) 164;
Rice v. Woods, 21 Pick. (Mass.) 30. "Where a judgment against a
firm and its individual members was released as to one member, the
judgment creditor had thereafter no right to have a receiver of the
partnership property appointed in supplementary proceedings."
Hunter v. Hunter, 73 N. Y. Supp. 886.

WBHutton v. Eyre, 6 Taunt. 289, 16 Rev. R. 619; Duck v. Mayeu
[1892], 2 Q. B. 511; Bates v. Wills Point Bank, 11 Tex. Civ. App. 73,
32 S. W. 339; Couch v. Mills, 21 Wend. (N. Y.) 424. And see Faneuil
Hall Nat. Bank v. Meloon, 183 Mass. 66, 66 N. E. 410, 97 Am. St.
Rep. 416.

lee Solly v. Forbes, 2 Broad. & B. 38, 22 Rev. R. 641; Price v.
Barker, 4 El. & Bl. 760; Duck v. Mayeu [1892], 2 Q. B. 511; Pearce^
v. Wilkins, 2 N. Y. 469.

220 AS TO THIRD PERSONS.

parties in respect of it will be futile.167 By statute in some
states a release of one partner by compromise does not oper-
ate as a release of all.188

Novation.

Where a partner retires, or the firm is dissolved and suc-
ceeded by a. new firm? the retiring partner, or the members
of the old firm, may be relieved of its liabilities by an agrees
ment with,,fne remfljninff partners or foe new firm, bv wfrieh
the hitter assume such liabilities, provided the creditor as-
miii- to siK-h agreement, discharges his former debtors, ;in-l
accepts the new [inn as his debtors. Such an agreemenl is
called a "novation," and the mutual agreements of the par-
ties thereto constitute a sufficient consideration to support it.
The agreement of the new firm to pay the debt constitutes a
sufficient consideration for the promise of the creditor to dis-
charge his former debtors, and vice versa, though there have
been distinctions drawn between cases where a new partner
has been introduced into the firm, and where a partner has
simply retired."'1' The difficulty in applying this rule is one
of fact, whether such an agreement as is here mentioned has
or has not been entered into.170 The mere retirement of a

i«7 Commercial Bank v. Jones [1893], App. Cas. 313.

i«8 See Wheeling Corrugating Co. v. Veach, 7 Ohio Dec. 521.

e-' See, generally, as to consideration, the following cases: Early
v. Burt, G8 Iowa, 716, 28 N. W. 35; Walstrom v. Hopkins, 103 Pa.
118; Backus v. Fobes, 20 N. Y. 204; Eagle Mfg. Co. v. Jennings, 29
Kan 657; Lodge v. Dicas, 3 Barn. & Aid. 611; David v. Ellice, 5
Barn. & C. 196; Thompson v. Percival, 5 Barn & Adol. 925; Lyth v.
Ault, 7 Exch. 669, Burdick's Cases, 385; Wild v. Dean, 3 Allen
(Mass.) 579; York v. Orton, 65 Wis. 6, 26 N. W. 166; Clark v. Bill-
ings, 59 Ind. 508.

i7o Bedford v. Deakin, 2 Barn. & Aid. 210; Jacomb v. Harwood,
2 Yes. Sr. 265; Kirwan v. Kirwan, 2 Cromp. & M. 617, Burdick's
Cases, 384; Gough v. Davies, 4 Price, 200; Blew v. Wyatt, 5 Car.
& P. 397; Robinson v. Wilkinson, 3 Price, 538, Burdick's Cases, 396,
18 Rev. R. 659.

TERMINATION OF LIABILITY. 221

partner raises no presumption in favor of such an agree-
ment,171 nor does mere silence of the creditor amount to an
assent.172 Of course, no agreement between the partners can
discharge their liability to a creditor without or against his
consent. 172a But though, in such a case, all the partners are
primarily liable to a creditor, as between themselves, the
agreement assuming debts creates the relation of principal
and surety, and the party in whose favor such an agreement
is made has all the rights of a surety. If he pays the debt,
he is subrogated to the rights of the creditor, and if, with no-
tice of the agreement, the creditor extends the time of pay-
ment to the other partners, he is discharged.173

Merger by Judgment.

Where a debt is reduced to judgment, it is merged in the
higher security, and can no longer be made the subject of a

"~ Vil _■■ Ill«— "■TT- rillMim I ill II II - --^ — ■— ■— ■»*— — »M^^

separate suit. Accordingly, if a partnership creditor obtains-
judgment upon his claim, he loses his remedy against the
other partners, even if they were not known to him.174 This

iTiLyth v. Ault, 7 Exch. 669, Burdick's Cases, 385; Benson v. Had-
field, 4 Hare, 37.

172 Heath v. Percival, 1 P. Wms. 682; Norman v. Jackson Fertilizer
Co., 79 Miss. 747, 31 So. 419.

i'-n. "A retiring partner remains liable to all the existing debts of
the firm to the same extent as if he had not retired and hence an
agreement between him and the remaining partner that the remain-
ing partner will assume and pay all existing debts of the firm, while
valid as between themselves, cannot change their relation to the
creditors unless the creditors become parties thereto." Grotte v.
Weil, 62 Neb. 478, 87 N. W. 173.

i" McLaughlin v. Bieber, 56 N. Y. Supp. 490; Smith v. Shelden,
35 Mich. 42; Laylin v. Knox, 41 Mich. 40; Chandler v. Higgins, 109
111. 602; Shamburg v. Abbott, 112 Pa. 6, 4 All. 518; Palmer v. Purdy,
83 N. Y. 144; Savage v. Putnam, 32 N. Y. 501; Sydam v. Cannon, 1
Houst. (Del.) 431; Conwell v. McCowan, 81 111. 285.

174 Lindl. Partn. p. 255; Kendall v. Hamilton, 4 App. Cas. 504, Bur-
dick's Cases, 488; King v. Hoare, 13 Mees. & W. 494; Lingenfelser

222 AS TO THIRD PERSONS.

rule has been changed by statute in some states. It has no
application to the case of a deceased partner. The creditor
may recover judgment against the survivors and also prove
against the estate of the deceased.175 Proof in bankruptcy
against one partner will not so merge the debt as to prevent
recourse on the others.170

Bankruptcy.

The individual bankruptcy of a partner and his subsequent
discharge will release him from his liabilities as a partner,177
bul ilic bankruptcy and discharge of his copartners only will
not have this effect, and it has been held that a separate dis-
charge will not relieve a partner of liability for firm debts
unless there were no partnership assets at the time of the dis-
charge.178

Limitations.

A partner's liability to be sued upon partnership obligation
may, of course, be barred bv the statute of limitations.

v. Simon, 49 Ind. 82; Olmstead v. Webster, 8 N. Y. 413; Smith v.
Black, 9 Serg. & R. (Pa.) 142; Scarf v. Jardine, 7 App. Cas. 345.

"6 Lindl. Partn. p. 257.

iTCKeay v. Fenwick, 1 C. P. Div. 745; Whitwell v. Perrin, 4 C. B.
(N. S.) 412.

177 Ex parte Hammond, L. R. 16 Eq. 614; Bovill v. Wood, 2 Maule
& S. 23; In re Brick, 4 Fed. 804; In re Gay, 98 Fed. 870; Tucker v.
Oxley, 5 Cranch (U. S.) 34; In re Stevens, 1 Sawy. 397, Fed. Cas.
No. 13,393; West Philadelphia Bank v. Gerry, 106 N. Y. 467, 13 N. E.
453; Curtis v. Woodward, 58 Wis. 499, 17 N. W. 328, 46 Am. Rep.
647; Hawley v. Campbell, 62 Cal. 442. But compare Perkins v.
Fisher, 80 Ky. 11; Glenn v. Arnold, 56 Cal. 631; In re Noonan, 3
Biss. 491, Fed. Cas. No. 10,292.

178 Corey v. Perry, 67 Me. 140, Burdick's Cases, 466, 24 Am. Rep.
15; Crompton v. Conkling, 9 Ben. 225, Fed. Cas. No. 3,407.

APPLICATION OF ASSETS. 223

Application of Assets to Liabilities.

123. This subject will be treated under the following heads :

(a) Application by voluntary act of partaejs.

(b) Application under direction of court.

Same — Application by Partneks.

124. The partners may dispose of their firm and individual
assets in a,nv way fli^y ?ee fit- provided-
Proviso — They must act in good faith, and not_ in fraud of

creditors.

Partners own the firm property just as an individual owns
his own individual property. They may, accordingly, by
common agreement, make any disposition of it that an indiv-
idual could make of his property.179 This right of dispos-
ition is, of course, subject to the general rule of law, not pecu-

«b Allen v. Center Valley Co., 21 Conn. 130, 54 Am. Dec. 333;
Hargadine-McKittrick, Dry Goods Co. v. Belt, 74 111. App. 581; Fisher
v. Syfers, 109 Ind. 514, 10 N. B. 306; Hawk Eye Woolen Mills v.
Conklin, 26 Iowa, 422; Reyburn v. Mitchell, 106 Mo. 365, 16 S. W.
592; Sexton v. Anderson, 95 Mo. 373, 8 S. W. 564; Fitzgerald v.
Christl, 20 N. J. Eq. 90; Citizens' Bank v. Williams, 128 N. Y. 77,
28 N. E. 33; Robb v. Stevens, Clarke Ch. (N. Y.) 191; Darby v.
Gilligan, 33 W. Va. 246, 10 S. E. 400. "The partnership creditors,
except when they are given the benefit of the partner's equity, have
•of themselves no other claim than any creditor has on his debtor's
property. * * * The partners have jointly the same right of ab-
solute disposition of their joint property that any individual has.
They may sell it, pledge it, convert it into other forms, divide it
up among themselves, devote it to the payment of debts or part of
the debts, Or exercise other ownership over it, subject only to each
other's rights, and to the operation of statutes forbidding voluntary
conveyances to hinder and defraud creditors." Bates, Partn. § 824.

22 I AS TO THIRD PERSONS.

liar i" partneship, that no one can make a valid voluntary con-
veyance in fraud of Ids creditors.180

All the partners may, by their joint act, dispose of part-
nership property in liquidation and payment of a debt owing
by an individual member of the firm ,sl or for a debt for
which they are jointly liable outside of the business of the
firm.182 The trend of modem authority is to the effed thai
the fact that the firm is solvent, or that such application of
its assets to individual debts will render it insolvent, does nol
deprive the partners of their right to make such application,,
provided, always, as already stated, the partners act in good
faith, and not in fraud of creditors,183 and such a tendency
seems in harmony with the modern authorities repudiating
the so-called trust fund doctrine as applied to corporations.

iso Purple v. Farrington, 119 Ind. 164, 21 N. E. 543; Sexton v. An-
derson, 95 Mo. 381; Robinson v. Allen, 85 Va. 721; Bonwit v. Hey-
man, 43 Neb. 537, 61 N. W. 716.

isj Fisher v. Syfers, 109 Ind. 514, 10 N. E. 306; Assignment of
Stewart. 62 Iowa, 614, 17 N. W. 897; Woodmansie v. Holcomb, 34
Kan. 35, 7 Pac. 603; SchmJiUapp v^ Currie. 55 Miss. 597.: Sexton v.
Anderson, 95 Mo. 373, 8 S. W. 564; Bernheimer v. Rindskopf, 116
N. Y. 428, 22 N. E. 1074; Snodgrass' Appeal, 13 Pa. 471; Hage v.
Campbell, 78 Wis. 572, 47 N. W. 179, Mechem's Cases, 453; Case v.
Beauregard, 99 U. S. 119, Mechem's Cases, 440, Ames' Cas. 246.

182 Saunders v. Reilly, 105 N. Y. 12, 12 N. E. 170, Burdick's Cases,
277; Rouss v. Wallace, 10 Colo. App. 93; Hoare v. Oriental Bank
Corp., 2 App. Cas. 589; Citizens' Nat. Bank v. Wehrle,- 9 Ohio Dec.
330.

183 Singer v. Carpenter, 125 111. 117, 17 N. E. 761; Hargadine-Mc-
Kittrick Dry Goods Co. v. Belt, 74 111. App. 581; Purple v. Farring-
ton, 119 Ind. 164, 21 N. E. 543; Johnston v. Robuck, 104 Iowa, 523,
73 N. W. 1062; Hanover Nat. Bank v. Klein, 64 Miss. 141, 8 So. 208;
Goddard-Peck Grocery Co. v. McCune, 122 Mo. 426, 25 S. W. 904,
Mechem's Cases, 457 (overruling Phelps v. McNeely, 66 Mo. 555);
Seger's Sons v. Thomas Bros., 107 Mo. 635, 18 S. W. 33; Wilcox v.
Kellogg. 11 Ohio, 394; Anderson v. Norton, 15 Lea (Tenn.) 14;
Carver Gin & Mach. Co. v. Bannon, 85 Tenn. 712, 4 S. W. 831; Huis-
kamp v. Moline Wagon Co., 121 U. S. 310; Kincaid v. National Bank
Paper Co., 63 Kan. 288, 65 Pac. 247, 54 L. R. A. 412.

*-...

APPLICATION OF ASSETS. 225

There is considerable authority, however, for the veiw that a
transfer of partnership property by one partner with the con-
sent of the other partners, or by all the partners, to pay in-
dividual debts, is fraudulent and void as to firm creditors, un-
ma miner to pay the partnership debts.184

Even if solvent, the firm may sell any of its property ana
.convey a good title to the purchaser free from the claim of
^ less the firm was then solvent, and had sufficient property re^x
- firm creditors.185

The partners may, by mutual agreement, as by the sale of
one partner's interest to his copartner, convert the partner-
ship property into individual property, and thereby defeat
the priority of firm creditors,186 and it is immaterial whether

is4Bartlett v. Meyer-Schmidt Grocer Co., 65 Ark. 290, 45 S. W.
1.063; Teague v. Lindsey, 106 Ala. 266, 17 So. 538, Burdick's Cases,
207; Patterson v. Seaton, 70 Iowa, 689, 33 N. W. 228; Franklin Sugar
Refining Co. v. Henderson, 86 Md. 452, 38 Atl. 991; Jackson Bank v.
Durfey, 72 Miss. 971, 18 So. 456, Burdick's Cases, 201; Heineman v.
Hart, 55 Mich. 64, 20 N. W. 792; Bannister v. Miller, 54 N. J. Eq.
121, 32 Atl. 1066, Burdick's Cases, 207; Clements v. Jessup, 36 N. J.
Eq. 569; Arnold v. Hagerman, 45 N. J. Eq. 186, 17 Atl. 93, Mechem's
Cases, 446; Bergman v. Jones, 10 N. D. 520, 88 N. W. 284, 88 Am. St.
Rep. 739; Bulger v. Rosa, 119 N. Y. 459, 24 N. E. 853; Wilson v. Rob-
ertson, 21 N. Y. 587; Menagh v. Whitwell, 52 N. Y. 146, Burdick's
Cases, 222, Ames' Cas. 229; Wiggins v. Blackshear, 86 Tex. 670, 26
S. W. 939, Burdick's Cases, 198; Darby v. Gilligan, 33 W. Va. 246,
10 S. E. 400. Compare Nordlinger v. Anderson, 123 N. Y. 544, 25
N. E. 992; Bernheimer v. Rindskopf, 116 N. Y. 428, 22 N. E. 1074.

iss Saunders v. Reilly, 105 N. Y. 12, 12 N. E. 170, Burdick's Cases,
277.

isc Mayer v. Clark, 40 Ala. 259; Levy v. Williams, 79 Ala. 171;
Schleicher v. Walker, 28 Fla. 680, 10 So. 33; Ladd v. Griswold, 9 111.
25; Singer v. Carpenter, 125 111. 117, 17 N. E. 761; City of Maquo-
keta v. Willey, 35 Iowa, 323; Woodmansie v. Holcomb, 34 Kan. 35,
7 Pac. 603; Wilson v. Soper, 13 B. Mon. (Ky.) 411; Griffith v. Buck,
13 Md. 102; Robb v. Mudge, 14 Gray (Mass.) 534; MafByn v. Hatha-
way, 106 Mass. 414; Schmidlapp v. Currie, 55 Miss. 597; Sexton v.
Anderson, 95 Mo. 373, 8 S. W. 564; Stanton v. Westover, 101 N. Y.
265, 4 N. E. 529; Menagh v. Whitwell, 52 N. W. 146, Burdick's Cases,
15

226 AS T0 THIRD PERSONS.

the t i nil is solvent or not, provided the partners act in good
Eaith,18' though there arc cases holding that such a conver-
sion is void, as being in fraud of creditors, where the firm
was at the time insolvent, <>r where there was no consider-
ation,— as where one partner sells his interest to an insolvent
copartner in consideration <>f the hitter's assumption of the
firms <lcl)ts.18S Certainly, if cither partner remains Bolvenl
and in the jurisdiction, or if the property remains in the

222; Dimon v. Hazard, 32 N. Y. 65; Ketchum v. Durkee, 1 Barb. Ch.
(N. Y.) 480, 45 Am. Dec. 412; Holmes v. Hawes, 8 Ired. Eq. (N. C.)
21; Mortley v. Flanagan, 38 Ohio St. 401; Baker's Appeal, 21 Pa. 76;
Waterman v. Hunt, 2 R. I. 298; Croone v. Bivens, 2 Head. (Tenn.)
339; Case v. Beauregard, 99 U. S. 119, Mechem's Cases, 440; Ames'
Cas. 246; Ex parte Ruffin, 6 Ves. 119, Burdick's Cases, 192; Bolton
v. Puller, 1 Bos. & P. 539, Burdick's Cases, 187; In re Kemptner,
L. R. 8 Eq. 286, Burdick's Cases, 196. The court will readily lay
hold of any circumstance in the transaction to bring back the prop-
erty into a just course of administration among the general firm
creditors. Accordingly, if the transfer is executbry prjncomplete,
the conversion may be defeated by the firm creditors. In re Fear, 4
Deacon & C. 56; Fitzgerald v. Christl, 20 N. J. Eq. 90. Partners may
agree that any member may withdraw any part of the common
stock. Such part will then become his own. Lefevre's Appeal, 69
Pa. 122. Partners may divide the firm property between them, and
thus make it separate property. Spencer v. Jones, 92 Tex. 516, 50
S. W. 1118. Where a firm sells and transfers its property to a cor-
poration for shares of the corporate stock, and the stock is divided
among the partners, the stock is not partnership assests. Singer v.
Carpenter, 125 111. 117, 17 N. E. 761.

187 Allen v. Center Valley Co., 21 Conn. 130; Singer v. Carpenter,
125 111. 117, 17 N. E. 761; Myers v. Tyson, 2 Kan. App. 464, 43 Pac.
91; Howe v. Lawrence, 9 Cush. (Mass.) 553; Stanton v. Westover,.
101 N. Y. 265, 4 N. E. 529.

188 Smith v. Heineman, 118 Ala. 195, 24 So. 364; Roop v. Herron,
15 Neb. 73, 17 N. W. 353; Black's Appeal, 44 Pa. 503; Darby v. Gil-
ligan, 33 W. Va. 246; Earle v. Art Library Pub. Co., 95 Fed. 544; In
re Cook, 3 Biss. 122, Fed. Cas. No. 3,151; Ex parte Mayou, 4 De Gex,
J. & S. 664. See Brayton v. Sherman, 45 App. Div. 58, 60 N. Y. Supp.
1118. The case of Phelps v. McNeely, 66 Mo. 554, took this view,
but it has since been overruled in Goddard-Peck Grocery Co. v. Mc-
Cune, 122 Mo. 426, 25 S. W. 904, Mechem's Cases, 457.

APPLICATION OF ASSETS. 227

hands of the transferee for some time, the transaction can-
not be said to hinder, delay, or defraud firm creditors, be-
cause, in such case, the firm creditor could proceed to make
his claim out of either partner alone by legal process.189

A partner may apply his individual property to the pay-
ment of firm debts, for such debts are in fact his debts, — so
much so that, as has been seen, firm creditors may levy an at-
tachment or execution upon such individual property;190 but
this has been held to be a fraud on the separate creditors
re there are not enough separate assets left to pay them.101

Same — Application by Court.

125. At law, creditors may gain certain priorities in the dis-
tribution of assets by superior diligence in prosecuting
their claims.

126. ^In eauitvl the assets are distributed pro rata among

the different classes of creditors entitled to them.

At law, a firm creditor may gain a priority over other
firm creditors in the firm property by being the first to levy
an attachment or execution thereon. He may gain a similar
priority in individual assets even over individual creditors
in the same manner, for, as has been seen, each partner is
liable in solido for the firm debts. A legal priority once ac-
quired, will be preservd in a subsequent distribution of assets
by a court of equity.102

189 See supra, § 116; Stanton v. Westover, 101 N. Y. 265, 4 N. E.
529; Wiggins v. Blackshear, 86 Tex. 665, 26 S. W. 939, Burdick's
Cases, 198.

100 Gadsden v. Carson, 9 Rich. Eq. (S. C.) 252; Gallagher's Appeal,
114 Pa. 353, 7 Atl. 237; Newman v. Bagley, 16 Pick. (Mass.) 570, Bur-
dick's Cases, 285.

loiHolton v. Holton, 40 N. H. 77; O'Neil v. Salmon, 25 How. Prac.
(N. Y.) 246; Jackson v. Cornell, 1 Sandf. Ch. (N. Y.) 348.

loaSteiner v. Peters Store Co., 19 Ala. 371, 24 So. 576; Preston v.

228 AS TO THIRD PERSONS.

An individual creditor may obtain a priority in individual
assets by being firsl with bis exectuon, bu1 he cannot obtain
a corresponding priority in the firm property, because, al-
though he may levy thereon, all he can sell is his debtor's in-
terest therein, which is merely a share of what remains after
paying all the partnership debts, and the settlement of the
account between the partners.193

When llie assets are in the hands of a court of equity for
distribution, as in the case of a bill for a settlement of the
partnership affairs, an assignment for the benefit of creditors,
bankruptcy, or the death of a partner, no creditor can ob-
tain any advantage by superior diligence, but the assets will
be equally distributed between creditors of the same class ac-
cording to certain rules of priority, now to be considered. 193a

Colby, 117 111. 477, 4 N. E. 375; Adams v. Sturges, 55 111. 468; Gil-
laspy v. Peck, 46 Iowa, 461; Smith v. Smith, 87 Iowa, 93, 54 N. W.
73, 43 Am. St. Rep. 359; Meech v. Allen, 17 N. Y. 300, Mechem's
Cases, 487, Ames* Cas. 326; Wilder v. Keeler, 3 Paige, Ch. (N. Y.)
167; Cumming's Appeal, 25 Pa. 268; In re Sandusky, 17 N. B. R.
452, Burdick's Cases, 421, Fed. Cas. No. 12,308. A judgment against
the firm is a lien on the separate real estate of the partners, and is
entitled to priority over a subsequent judgment in favor of a sep-
arate creditor. Cumming's Appeal, 25 Pa. 268.

las See ante, § 72. A chattel mortgage on firm property executed
by the firm takes priority over an execution against an individual
partner, levied before the mortgage was executed. Swan v. Gilbert,
175 111. 204, 51 N. E. 604. A chattel mortgage on one partner's in-
terest to secure an individual debt is postponed to a subsequent ex-
ecution in favor of firm creditors. Daniel v. Crowell, 125 N. C. 519,
34 S. E. 684. A separate execution is postponed to a subsequent joint
execution. King's Appeal, 9 Pa. 124; Cooper's Appeal, 29 Pa. 9; Dyer
v. Clark, 5 Mete. (Mass.) 562, Ames' Cas. 251. If a separate execution
creditor levy upon the joint stock, and the other partners have no
equities against the defendant in the execution, having parted with
their lien, the separate creditor will take the proceeds of sale in
preference to a subsequent joint execution. York County Bank's
Appeal, 32 Pa. 446.

i»sa See Foster v. Field, 13 Old. 230, 74 Pac. 190; Adams v. Hack-
ett, 7 Cal. 187; Holmes v. McDowell, 15 Hun (N. Y.) 585, Burdick's
Cases, 434; Jackson v. Lahee, 114 111. 287, 2 N. E. 172.

APPLICATION OF ASSETS. 229

127. Priorities in Firm Property. — Firm assets must be ap-
plied tojthe discharge of firm debts, in preference to

the claims of the partners or of their individual cred-
itors, except —

Exceptions —

(a) Where firm assets have been converted in good faith

into separate property.

(b) Where the separate esta^ nt fl r^ffl- h^ heen frqnfr

ulently converted to the use of the firm.

(c) Where a partner carries on a separate business and

becomes a creditor in respect to that business. a

(d) Where a partner has been discharged in bankruptcy,

and has afterwards become a creditor of his former
partnership.

128. The so-called partner's lien is superior to the claims of
the other partners or their creditors to any part of

T^^^^^^^raMMnawMMWMMwmraMwwwiMMiiiiiiwiiiiiB [■■.m «i.._.„.

the firm assets.

Firm Creditors have Priority.

Where the assets of a partnership are in the hands of a
court of equity for distribution to the parties entitled thereto,
the rule is well established that such assets must be first ap-
plied to the payment of the firm creditors before any portion
can be applied to the claims of the individual partners or
their creditors.104 This priority does not result from any lien

is* Weil v. Jaeger, 174 111. 133, 51 N. E. 196; Hargadine-McKittrick
Dry Goods Co. v. Belt. 74 111. App. 581; Coe v. Simmons Boot &
Shoe Co., 61 111. App. 602; Preston v. Colby, 117 111. 477, 4 N. E. 375;
Bush v. Clark, 127 Mass. Ill; Edison Electric Illuminating Co. v.
DeMott, 51 N. J. Eq. 16, 25 Atl. 952; Wilder v. Keeler, 3 Paige, Ch.
(N. Y.) 167; Kirby v. Carpenter, 7 Barb. (N. Y.) 373; Ganson v.
Lathrop, 25 Barb. (N. Y.) 455; Payne v. Matthews, 6 Paige, Ch.
(N. Y.) 19; Rodgers v. Meranda, 7 Ohio St. 179, Mechem's Cases,
463; In re Stewart, 193 Pa. 347, 44 Atl. 434; Hoffer's Appeal, 3

230 AS TO THIRD PERSONS.

which the firm creditors have upon the firm assets, because
they have no lien on such assets, any more than any simple
creditor lias upon the property of his debtor. It results from
the lien which as has been seen,1'"11 each partner has, to have
the assets applied first to the payment of firm <lehts, and then
to the payment of whatever may he due him from the other
partners <>n partnership account. The firm creditors arc prac-
tically subrogated u> this lien, and their right to a priority
depends upon it.195 This priority of the firm creditors ex-

Brewst. (Pa.) 164; Black's Appeal, 44 Pa. 503; Andress v. Miller, 15
Pa. 316; Houseal's Appeal, 45 Pa. 484; Gordon's Estate, 3 W. N. C.
(Pa.) 410; Frow's Estate, 73 Pa. 459; Amsinck v. Bean, 22 Wall.
(U. S.) 395. But see U. S. Bankruptcy Law 1898, § 5 (g). "The
rule is that a partner in a firm against which a commission of bank-
ruptcy issues shall not prove in competition with the creditors of
the firm, who are in fact his own creditors; shall not take part
of the fund to the prejudice of those who are not only creditors of
the partnership, but of himself." Ex parte Sillitoe, 1 Glyn & J. 374,
Ames' Cas. 428.

B. & L. were partners. B. & L., as a partnership, was also a mem-
ber of two other firms— B., L. & S. and B., L. S. & D. The firms all
failed, and their property was attached by creditors. The creditors
of B., L. & S. and B. L., S. & D. obtained the first attachments, and
placed them in the hands of the sheriff, before the creditors of B. &
L. placed theirs in his hands. The sheriff levied all the writs on
the property in the order in which they were placed in his hands.
The sheriff had in his hands a sum of money received from the sale
of the property of B. & L. to apply on the executions issued on judg-
ments rendered in the actions. Held, that the creditors of B. & L.
were entitled to the money, and that, where a partnership is com-
posed of two or more firms, the creditors of one of the firms are en-
titled to a preference, in the payment of their debts over the credit-
ors of the whole partnership, out of the money or the proceeds of
the property of that firm." Bullock v. Hubbard, 23 Cal. 495.

i0->aAnte, § 102.

L»5 Allen v. Center Valley Co., 21 Conn. 130, 54 Am. Dec. 333;
Hawk Eye Woolen Mills v. Conklin, 26 Iowa, 422; Saunders v.
Reilly, 105 N. Y. 12, 12 N. E. 170, Burdick's Cases, 277; Foster v.
Barnes, 81 Pa. 377; Bardwell v. Perry, 19 Vt. 292, 47 Am. Dec. 687;
Hapgood v. Cornwell, 48 111. 64; John Spry Lumber Co. v. Chappell,
184 111. 539, 56 N. E. 794; Warren v. Farmer, 100 Ind. 593; Robb v.

APPLICATION OF ASSETS. 231

tends to the case of a partnership by estoppel, or holding
out. 7 9 6 Joint but not partnership creditors canTiotjjnjhri jjiiij
priority, fur a partner's lien upon which this equity rests (Lies
not extend to such debts. Accordingly, such debtors are post-
Stevens, Clarke, Ch. (N. Y.) 191; Ketchum v. Durkee, 1 Barb. Ch.
(N. Y.) 480; Lefevre's Appeal, 69 Pa. St. 126; York County Bank's
Appeal, 32 Pa. 446; Doner v. Stauffer, 1 Pen & W. (Pa.) 198, Bur-
dick's Cases, 218; Snodgrass' Appeal, 13 Pa. 471; Schuster v. Farm-
ers' & Merchants' Nat. Bank, 23 Tex. Civ. App. 206, 54 S. W. 777,
55 S. W. 1121, 56 S. W. 93; Case v. Beauregard, 99 U. S. 119, Mechem's
Cases, 440, Ames' Cas. 246; Fitzpatrick v. Flannagan, 106 U. S. 648;
Ex parte Ruffin, 6 Ves. 127, Burdick's Cases, 192, 19 Eng. Rul. Cas.
628. Compare Ferson v. Monroe, 1 Fost. (N. H.) 462; Tenney v.
Johnson, 43 N. H. 144. In Case v. Beauregard, 99 U. S. 119, 124, 125,
Mechem's Cases, 440, Mr. Justice Strong stated the law as follows:
"The right of each partner extends only to the share of what may
remain after payment of the debts of the firm and a settlement of
its accounts. Growing out of the right, or rather included in it, is
the right to have the partnership property applied to the payment of
the partnership debts, in preference to those of any individual part-
ner. This is an equity that partners have between themselves, and
in certain circumstances it inures to the benefit of the creditors of
the firm. The latter are said to have a privilege or preference,
sometimes loosely denominated a 'lien,' to have the debts due to
them paid out of the assets of a firm in course of liquidation, to the
exclusion of the creditors of its several members. Their equity, how-
ever, is a derivative one. It is not held or enforcible in their own
right. It is practically a subrogation to the equity of the individual
partner, to be made effective only through him. Hence, if he is not
in a condition to enforce it, the creditors of the firm cannot be."
A simple creditor of a firm, although he has no lien upon its assets,
has such an interest therein as entitles him to attack for fraud a
chattel mortgage executed by the firm to other creditors. Taylor v.
Riggs, 8 Kan. App. 323, 57 Pac. 44.

i'"'' Van Kleeck v. McCabe, 87 Mich. 599, 40 N. W. 872; Gibbs v.
Humphrey, 91 Wis. Ill, 64 N. W. 750, Burdick's Cases, 475: Thayer
v. Humphrey, 91 Wis. 276, 64 N. W. 1007, Burdick's Cases, 117;
Kelly v. Scott, 49 N. Y. 595. See, also, Adams v. Albert, 155 N. Y.
356, 49 N. E. 929. Compare Broadway Nat. Bank v. Wood, 165 Mass.
312, 43 N. E. 100, Burdick's Cases, 129; Swann v. Sanborn, 4 Woods,
625, Fed. Cas. No. 13,675.

232 AS TO THIRD PERSONS.

poned to the firm creditors.197 And it naturally results from
the rule that sale or mortgage by a partner conveys only his
interesl after settlement,1978 that the mortgagee of a part-
ner's interest stands in no better position.197*3

Exceptions l<< Rule — Conversion of Firm into Separate Prop-
er! i/.
Since the priority of linn creditors depends upon the ex-
istence of .the partner's lien, if the partners themselves are
not in a condition to enforce it, the firm creditors cannot, and
their priority jr g^ne This is the case where the .tjftrtners
have in ffood faith converted the< firm property into; separate
property.198 The right of the partners to do this as again st
firm creditors has been already considered.199 ^

Same — Fraudulent Conversion of Individual Property.

Where the separate property of a partner has been fraudu-
lently converted to the use of the firm, the equity of such part-
ner or of his creditors to have its value restored to his estate
is of equal grade with the claims of firm creditors.200

197 Second Nat. Bank v. Burt, 93 N. Y. 233; Turner v. Jaycox, 40
N. Y. 470; Forsyth v. Woods, 11 Wall. (U. S.) 484.

i»7a See ante, § 73.

i»7b Daniel v. dwell, 125 N. C. 519, 34 S. E. 684.

ios Case v. Beauregard, 99 U. S. 119, Mechem's Cases, 440, Ames'
Cas. 246; West v. Skip, 1 Ves. Sr. 239, 19 Eng. Rul. Cas. 618; Ex
parte Ruffin, 6 Ves. 119, Burdick's Cases, 192, 19 Eng. Rul. Cas. 618;
Rice v. Barnard, 20 Vt. 479; York County Bank's Appeal, 32 Pa. 446;
Lefevre's Appeal, 69 Pa. 126; Walker v. Eyth, 25 Pa. 216; Robb v.
Stevens, Clark, Ch. (N. Y.) 191; Sage v. Chollar, 21 Barb. (N. Y.)
596. Where two of five partners assign all their interest in the part-
nership property to the other three, who assume the firm debts, the
firm creditors have no lien thereon. The remaining partners may
assign for the benefit of their own creditors. Baker's Appeal, 21 Pa.
76.

i»9 See ante, § 124 et seq.

200 Bates, Partn. § 837; Rodgers v. Meranda, 7 Ohio St. 179, 194,

APPLICATION OF ASSETS. 233

Same — Separate Business

Where a partner carries on a business on his own account,
either by himself or with others, separate and distinct from
the business of the firm, a claim on account of such separate
business may be proved in competition with firm creditors.201
It is only where articles of one trade have been furnished to
the other that the exception applies.202

Same — Partners Discharged in Bankruptcy.

A partner who has become bankrupt and been discharged
from his debts, and afterwards becomes a creditor of his for-
mer firm, may share with the firm creditors in the firm as-
assets.203

Partners are Prior to Individual Creditors.

A partner's lien extends to claims for advance-, old., and
takes precedence of the claims of the individual creditors of
the other partners.204

Burdick's Cases, 424, Mechem's Cases, 463; Ex parte Sillitoe, 1 Glyn
& J. 374, Ames' Cas. 430; Ex parte Kendal, 1 Rose, 71.

201 Bates, Partn. § 837; Ex parte Sillitoe, 1 Glyn & J. 374, Ames'
Cas. 428; Ex parte Cook, Montagu, 228, Ames' Cas. 432; In re Buck-
hause, 2 Low. 331, Fed. Cas. No. 2,086; Rodgers v. Meranda, 7 Ohio
St. 179, Burdick's Cases, 424, Mechem's Cases, 463. But see In re
Rieser, 19 Hun (N. Y.) 202.

202 The debt must grow out of a transaction between trade and
trade, in order to fall within the exception. The mere fact that a
partner loaned his firm £100, and that he also carried on a separate
trade, is not sufficient. Ex parte Sillitoe, 1 Glyn & J. 374, Ames' Cas.
421.

son Bates, Partn. § 837.

so* See ante, § 102, "Partner's Lien." See, also, Buchan v. Sum-
ner, 2 Barb. Ch. (N. Y.) 165; Crooker v. Crooker, 52 Me. 267; Hap-
good v. Cornwell, 48 111. 64; Walter v. Herman, 23 Ky. L. R. 741, 62
S. W. 857; West v. Skip, 1 Ves. Sr. 242, 19 Eng. Rul. Cas. 622. Rep-
resentatives of partner entitled to set off debts, and have all allow-
ances before the separate creditors of the other can take his share;
and they have a lien for such demand. West v. Skip, 1 Ves. Sr. 239,
19 Eng. Rul. Cas. 618.

/

234 AS TO THIRD PERSONS.

129. Priorities in Separate Property. — Individual assets

must be applied to the discharge of individual debts,
in preference to firm debts, except —

Exceptions —

(a) Irisomejurisdmiion^, individual creditors have no,

priority over firm creditors.

(b) Where there is no joint estate, and no living solvent

partner, the individual creditors have no priority.

(c) Where there is a secret or dormant partner, but no

ostensible firm, firm creditors may prove against
either ioint or separate estate. .

Separate Creditors have Priority in Separate Property. —

It is the prevailing rule in most jurisdictions that the sep-
arate estate of a partner must be applied to the payment of his
individual debts, in preference to the debts of a firm of which
he is a member, — in short, that separate creditors have a pri-
ority over firm creditors in the distribution of the separate
estate.205 It is difficult, if not impossible, to assign any

205 Emanuel v. Bird, 19 Ala. 596; Brown v. Stewart, 78 111. App.
387; Moline Water Power & Mfg. Co. v. Webster, 26 111. 233; Dog-
gett v. Dill, 108 111. 560, Burdick's Cases, 495, Mechem's Cases, 395;
Union Nat. Bank v. Bank of Commerce, 94 111. 271; Hundley v. Far-
ris, 103 Mo. 78, 15 S. W. 312; Davis v. Howell, 33 N. J. Eq. 72; Bur-
dick's Cases, 438; Greene v. Butterworth, 45 N. J. Eq. 738, 17 Atl.
949; Wilder v. Keeler, 3 Paige Ch. (N. Y.) 167; Kirby v. Carpenter,
7 Barb. (N. Y.) 373; Ganson v. Lathrop, 25 Barb. (N. Y.) 455; Payne
v. Matthews, 6 Paige Ch. (N. Y.) 19; Meech v. Allen, 17 N. Y. 300;
Rodgers v. Meranda, 7 Ohio St. 179, Paige's Cas. 223, Burdick's Cases,
424, Mechem's Cases, 463; Black's Appeal, 44 Pa. 503; Lord v. Deven-
dorf, 54 Wis. 491, 11 N. W. 903; Murrill v. Neill, 8 How. (U. S.) 414;
Peters v. Bain, 133 U. S. 670; In re Estes, 3 Fed. 134; Ex part©
Crowder, 2 Vern. 706. The United States bankruptcy law of 1898
expressly declares that the joint estate must be applied first in pay-
ment of joint creditors, and the separate estate in payment of sep-
arate creditors, and only the surplus of each estate is to be applied

APPLICATION OF ASSETS. 235

sound legal reason for this rule.206 It really rests upon con-
siderations of convenience and the notion that, inasmuch as
firm creditors have a priority in firm assets, it is no more than
just that separate creditors should have a similar priority in
separate assets.207 It should be noted, however, that there
is not a similar reason for the priority, the firm creditor's pri-
ority resting upon the equity of the other partners to have
the firm assets applied to firm debts. But at all events, the
rule as stated prevails in England and the majority of the
states of this country.

The rule giving the separate creditors a priority over the
firm creditors in the distribution of the separate estate has
not been universally adopted. Some courts, recognizing the
indisputable fact that the firm creditors are as much the cred-
itors of a partner as his individual creditors, have held that
firm creditors are entitled to share pari passu with the separ-

in satisfaction of the other class of creditors. The rule has been
laid down in almost similar terms, even in the absence of statute.
See Murrill v. Neill, 8 How. (U. S.) 414; Ex parte Dear, 1 Ch. Div.
519. And see cases cited supra, this note.

Partnership realty, although standing in the name of the indi-
vidual members, is treated in equity as personalty belonging to the
firm, and subject to the payment of the partnership debts. Long v.
Slade, 121 Ala. 267, 26 So. 31; Overholt's Appeal, 12 Pa. 222; Lan-
caster Bank v. Myley, 13 Pa. 544. And see, generally, ante, §§ 79,
80. As to personalty standing in the name of one partner, but in
reality belonging to the firm, see New York Commercial Co. v.
Francis, 96 Fed. 266. The fact that a creditor has reduced a joint
and several liability for partnership tort to a joint judgment does
not prevent him from enforcing it against the separate estate of the
debtors. In re Blackford, 35 App. Div. 330.

2ooRodgers v. Meranda, 7 Ohio St. 179, Paige's Cas. 223, Burdiok's
Cases, 424, Mechem's Cases, 463; Gray v. Chiswell, 9 Ves. 126; Dut-
ton v. Morrison, 17 Ves. 211; Lodge v. Prichard, 1 De Gex, J. & S.
613.

*oi Rodgers v. Meranda, 7 Ohio St. 179, 180; Paige's Cas. 223, Bur-
dick's Cases, 424, Mechem's Cases, 463; Davis v. Howell, 33 N. J. Eq.
72, Burdick's Cases, 438; Ex parte Cook, 2 P. Wins. 500; Lacey v.

036 AS TO THIRD PERSONS.

ate creditors in the separate estate.208 With one qualific-
ation, this rule is correct on principle. This qualification is ^
thai linn creditors should be compelled to first exhaust the
joint estate, after which they should be admitted to share pari
passu with the individual creditors in the whole of the separ-
ate estate. This rests upon the equitable doctrine of the
marshalling of assets*?09.

Exceptions to Rule — No Join! Estate nor Living Solvent
Partner.
Where there is no joint estate and also no living solvent
partner to whom the firm creditors could resort, the rule does

not apply, and both firm and separate creditors -bare equally
in the separate estate,210 though some courts have taken a con-
trary view.211

Tlill, L. R. 8 Ch. App. 444. The rule rests upon the equities of the
partners, and not upon the equities of the creditors. Brown v. Stew-
art, 78 111. App. 387.

208 Hultzer v. Phillips, 26 S. C. 136, 1 S. E. 502; Bardwell v. Perry,
19 Vt. 292, 47 Am. Dec. 687; Pettyjohn's Ex'rs v. Woodruff's Ex'rs, 86
Va. 478, 10 S. E. 715; Ex parte Copland, 1 Cox, 420.

200 Hultzer v. Phillips, 26 S. C. 136, 1 S. E. 502; Blair v. Black, 31
S. C. 346, 9 S. E. 1033, Mechem's Cases, 477; Bardwell v. Perry, 19
Vt. 292; Adams v. Sturges, 55 111. 468. In Kentucky, the rule pre-
vailing allows the separate creditors to make the same percentage
of their debts out of the separate property that the firm creditors
have made out of the firm property, after which both classes of cred-
itors share pari passu in the balance of the individual estate. Fay-
ette Nat. Bank v. Kenney's Assignee, 79 Ky. 133. See, also, Bell v.
Newman, 5 Serg. & R. (Pa.) 78. But this rule cannot be sustained
on principle, any more than the rule giving the separate creditors
an absolute priority. It is erroneous in not allowing the firm cred-
itors to share in the whole of the separate estate after exhausting
the joint estate.

2iopahlman v. Graves, 26 111. 405; Ladd v. Griswold, 9 111. 25; Cur-
tis v. Woodward, 58 Wis. 499, 17 N. W. 328; Emanuel v. Bird, 19

211 Howe v. Lawrence, 9 Cush. (Mass.) 553; In re Gray's Estate,
111 N. Y. 404, 18 N. E. 719; Warren v. Farmer, 100 Ind. 593.

APPLICATION OF ASSETS. 23 7

Same — Secret Partnerships.

Where there is an actual but not an ostensible partnership,
all the partners but one being secret or dormant, the joint
creditors have an election to proceed against either the separ-
ate estate of the ostensible partner, or against the joint es-
tate. But if the firm creditors resort to the separate estate,
the separate creditors will be subrogated to their rights
against the joint estate.212

130. Individual assets must be applied to the discharge of
individual debts, in preference to a debt of the partner
to his firm, except —

Exceptions —

(a) Where the debt to the firm arises from a fraudulent

conversion of its property,

(b) Where the debt is in respect to a separate business

carried on by the partners.

The firm, as a creditor of a partner, cannot compete with
the latter's individual creditors in the separate estate, be-
cause this would, in effect, allow the bankrupt partner to com-
pete with his own creditors.213

Ala. 596; In re West, 39 Fed. 203; Alexander v. Gorman, 15 R. I.
421, 7 Atl. 243; McCulloh v. Dashiell's Adm'r, Har. & G. (Md.) 96;
Conrader v. Cohen, (C. C. A.) 121 Fed. 801; In re Sperry's Estate,
1 Ashm. (Pa.) 347; In re Lloyd, 22 Fed. 88; Ex parte Hayden, 1
Brown Ch. 454.

212 Elliot v. Stevens, 38 N. H. 311; Van Valen v. Russell, 13 Barb.
(N. Y.) 590; Ex parte Reid, 2 Rose, 84, Ames' Cas. 427; Reynolds v.
Bowley, L. R. 2 Q. B. 474. But see Lord v. Baldwin, 6 Pick. (Mass.)
348. Where the partnership is a secret one, a separate creditor of
the ostensible owner of the property, who first levies his execution,
will be preferred to a subsequent levy under an execution against
the partnership. In such a case, equity leaves the parties to their
rights at law. Brown's Appeal, 17 Pa. St. 480. It is a race of dili-
gence. Whitworth v. Patterson, 6 Lea (Tenn.) 119.

213 Harmon v. Clark, 13 Gray (Mass.) 114; Somerset Potters Works

238 AS TO THIRD PERSONS.

Exceptions to Rule.

Where a partner is indebted to his firm an account of his
fraudulent conversion of its property to his own use, the firm
may. to this extent, share With the individual creditors in the
separate estate.21^ This is obviously no more than justice.
As lias been seen, a similar exception allows a partner to com-
pete with firm creditors in the joint estate under similar cir-
cumstances. Another exception has been allowed where the
debt to the firm grew out of dealings between the firm and the
partner in respect to a separate trade carried on by the
latter.215

131. Individual assets must be applied to the discharge of
firm debts, in preference to a debt to a copartner.

Firm creditors have a priority in the separate estate over a
partner who is a creditor of the bankrupt partner, because
otherwise such partner would be competing with his own
creditors.216

132. Individual assets must be applied to the discharge of
individual debts, in preference to a debt of the partner
to his copartner, except —

Exceptions —

(a) Where there are nofirm debts, and

(b) Where the separate estate is insufficient to pay the
other separate creditors in full.

Where there are both firm and separate creditors, the sep-
arate assets must be applied in payment of the separate cred-

v. Minot, 10 Cush. (Mass.) 592; In re Hamilton, 1 Fed. 800; Am-
sinck v. Bean, 22 Wall. (U. S.) 395; Read v. Bailey, 3 App. Cas. 94,
Ames' Cas. 409; Ex parte Lodge, 1 Ves Jr. 166, Ames' Cas. 394.

-i + Read v. Bailey, 3 App. Cas. 94; Lacey v. Hill, 4 Ch. Div. 537;
Ex parte Yonge, 3 Ves. & B. 31; Cowan v. Gill, 11 Lea (Tenn.) 674.

215 Ex parte St. Barbe, 11 Ves. 413.

210 Ex parte Carter, 2 Glyn & J. 233.

APPLICATION OF ASSETS. 239

itors before payment to a copartner who is also a separate
creditor.217 The reason for this is that, if such partner
shared equally with the other separate creditors, the surplus
of the separate estate, which alone is applicable to firm cred-
itors, would be diminished, or, in other words, the partner
would be competing with the firm, and therefore his own cred-
itors, which is never permitted. This reason does not exist
where there are no firm creditors, as where all firm debts have
been satisfied and discharged in any manner. Accordingly,
in such a case, a partner may share equally with other separ-
ate creditors in his debtor partner's separate estate.218 So,
also, the reason fails where the separate estate is insufficient
to pay the other separate creditors in full, for in such case
there would be no surplus applicable to firm creditors, and
hence the partnerJ^not_competing with firm creditors. Ac-
cordingly, in such case also, a partner may share with the sep-
arate creditors.219

217 Hill v. Beach, 12 N. J. Eq. 31; Ex parte Kendall, 17 Ves. 514,
521; Ex parte Maude, L. R. 2 Ch. App. 550; Nanson v. Gordon, 1
App. Cas. 195.

218 Price v. Cavins, 50 Ind. 122; Hill v. Beach, 12 N. J. Eq. 31;
Payne v. Matthews, 6 Paige Ch. (N. Y.) 19; Scott's Appeal, 88 Pa.
173; Amsinck v. Bean, 22 Wall. (U. S.) 395; In re Dell, 5 Sawy. 344,
Fed. Cas. No. 3,774; Ex parte Andrews, 25 Ch. Div. 505; Ex parte
Crazebrook, 2 Deac. & C. 186; Ex parte King, 17 Ves. 115. Compare
Ex parte Moore, 2 Glyn & J. 166.

219 Ex parte Topping, 4 De Gex, J. & S. 551. See, also, Payne v.
Matthews, 6 Paige Ch. (N. Y.) 19.

't

Qo^ 'T

CHAPTER X.
ACTIONS.

133. Actions in Firm Name.

134. Actions by the Firm.

135. Disqualification of One Partner to Sue.

136. Actions against the Firm.

137. Actions between Partners.

138. Actions between Firms with a Common Member.

139. Actions on Individual Obligations.
140-141. Suits in Equity.

Actions in Firm Name.

133. Actions upon firm liabilities or demands must be
brought by or against the individual partners, except —

Exception — In some states statutes exist authorizing part-
nerships to sue and be sued in their firm name.

In the absence of statute, actions by or against partnerships
must be brought by or against the individual partners in their
individual names.1 The members of the firm are the real
parties in interest.2

In a number of states, statutes have been passed authoriz-
ing actions to be brought by or against partnerships in their

1 Roberts v. Rowan, 2 Har. (Del.) 314; Page v. Brant, 18 111. 38;
Davis v. Hubbard, 4 Blackf. (Ind.) 50; Barber v. Smith, 41 Mich.
138, 1 N. W. 992; Mitchell v. Railton, 45 Mo. App. 273; Lewis v.
Cline (Miss.), 5 So. 112; Crawford v. Collins, 45 Barb. (N. Y.) 269.
In Iowa, in the absence of statute, it was held that suits might be
in the firm name. See Johnson v. Smith, Morris (Iowa) 106.

2 Mitchell v. Railton, 45 Mo. App. 273.

IN FIRM NAME. 241

firm name.3 Under these statutes, suits may be brought
either in the firm name or in the name of the individual mem-
bers.4 Proceedings in the firm name under these statutes
are in the nature of proceedings in rem.5 Judgment should
be entered in firm name.6 These statutes do not have the ef-
fect of authorizing suits between a partner and his firm, or
between two firms with a common member.7

Actions by the Firm.

134. All the partners must join as plaintiffs in an action
upon a cause of action belonging to the firm, except —

Exceptions —

(a) Dormant and nominal partners are proper, but not
necessary, parties plaintiff.

(b) Where a contract is under seal, only those partners
named therein can sue.

(c) A partner may and sometimes must sue alone on con-
1 '" tracts made in his name.

(d) When the contract is a negotiable instrument, only
the partners named in the instrument can sue

thereon.

3 See Atlantic Glass Co. v. Paulk, 83 Ala. 404, 3 So. 800; United
States Exp. Co. v. Bedbury, 34 111. 459; Abernathy v. Latimore, 19
Ohio, 286; Whitman v. Keith, 18 Ohio St. 145; City of Opelika v.
Daniel, 59 Ala. 213; Leach v. Milburn Wagon Co., 14 Neb. 106, 15
N W. 232.

4 Harrison v. McCormick, 69 Cal. 616, 11 Pac. 456; Whitman v.
Keith, 18 Ohio St. 144. An appeal by a partner in his own name is
not authorized by a statute authorizing suits or appeals by a part-
ner in the firm name. Kline v. Swift Specific Co., 118 Ga. 514, 45
S. E. 314.

& Yarbrough v. Bush, 69 Ala. 170.

«Wyman v. Stewart, 42 Ala. 163; Storm v. Roberts, 54 Iowa, 677,
7 N. W. 124; Hawkins v. Lasley, 40 Ohio St. 37.

■Pollock, Partn. p. 121. But see 2 Bates, Partn. § 903, wherein

16

2 1 2 ACTIONS.

In an action upon a firm contract, all the persons who were
partners at the time it was made should l>o joined as plain-
tiffs,8 even after dissolution. 8a An infant partner should It
joined as a party plaintiff.0 No one who is not either an ac-
tual or an ostensible partner should be joined with the actual
partners.10

A dormant partner may or may not be joined as plaintiff
in a suit, and the joinder or omission is no ground for abate-
ment, non-suit, or writ of error. In other words, dormant
partners are always proper, but never necessary, parties
plaintiff.11 Nominal partners are proper, but not necessary,
parties plaintiff. They may, but need not, be joined.12

a contrary opinion is expressed. See, also, generally, infra, § 137
tt seq.

s American Cent. R. Co. v. Miles, 52 111. 174; Hyde v. Moxie Nerve-
Food Co., 160 Mass. 559, 36 N. E. 585, Burdick's Cases, 159; Mc-
Donnell v. Ford, 87 Mich. 198, 49 N. W. 545; Dob v. Halsey, 16
Johns. (N. Y.) 34; Waterbury v. Head, 12 N. Y. St. Rep. 361; DeWit
v. Lander, 72 Wis. 120, 39 N. W. 349; Bumpus v Turgeon, 98 Me.
550, 57 Atl. 383.

saBrann v. Woollacott, 129 Cal. 107, 61 Pac. 801.

oKell v. Nainby, 10 Barn. & C. 20; Osburn v. Farr, 42 Mich. 134.

3 N. W. 299.

loDelise v. Palladino, 16 Misc. Rep. 74, 37 N. Y. Supp. 705.

ii Lloyd v. Archbowle, 2 Taunt. 324; Monroe v. Ezzell, 11 Ala.
<603; Wilson v. Rockland Mfg. Co., 2 Har. (Del.) 67; Mitchell v. Dall,
2 Har. & G. (Md.) 159; Warner v. Griswold, 8 Wend. (N. Y.) 666;
Belshaw v. Colie, 1 E. D. Smith (N. Y.) 213; Howe v. Savory, 49
Barb. (N. Y.) 403; Bird v. Fake, 1 Pin. (Wis.) 290; Desha v. Hol-
land, 12 Ala. 513; Goble v. Gale, 7 Blackf. (Ind.) 218; Howe v.
Savory, 51 N. Y. 631; Hilliker v. Loop, 5 Vt. 116, 26 Am. Dec. 286.
Compare Secor v. Keller, 4 Duer (N. Y.) 416, wherein it is held that
a dormant partner is a real party in interest, and therefore must
be joined under the Code.

i^Kell v. Nainby, 10 Barn. & C. 20; Enix v. Hays, 48 Iowa, 86;
Hatch v. Wood, 43 N. H. 633; Lewis v. Greider, 51 N. Y. 231. Where
the nominal partner is named in the contract, he is a necessary
party plaintiff. Guidon v. Robson, 2 Camp. 302, Ames' Cas. 140.
Compare Kell v. Nainby, 10 Barn. & C. 20, Ames' Cas. 143; Cox v.

^

BY THE FIRM. 243

"Where the contract is made in the name of one partner, but
for the benefit of the firm, all the partners should join a'
plaintiffs in an action thereon.13 But where the contract is
under seal, only the partner in whose name it was made can
sue thereon.14 One partner may or must sue alone upon a
contract made in his name in cases where an agent may or
must sue alone upon a contract made for his principal. "Where
a contract is made with one partner in his individual capa-
city, he must sue alone thereon, although he may have in fact
been acting for the benefit of the firm.15 When the firm oc-
cupies substantially the position of an undisclosed principal,
the action may be brought either by all the partners jointly,
or by the partners alone in whose name the contract was
made.16

•"■ It is a general rule at common law that no person can main-

/ tain an action upon a negotiable instrument except the parties

Vjiamed therein. Even though the party entitled upon such

an instrument is an agent, the action must be brought in his

name, and cannot be brought in the name of the principal who

i- not a party.17 Accordingly, where a negotiable instru-

Hubbard, 4 C. B. 317; Spurr v. Cass, L. R. 5 Q. B. 656; Bishop v.
Hall, 9 Gray (Mass.) 430.

i» Garrett v. Handley, 3 Barn. & C. 465; Gilbert v. Lichtenberg,
98 Mich. 417, 57 N. W. 259; McDonnell v. Ford, 87 Mich. 198, 49
N. W. 545; Wiley v. Logan, 95 N. C. 358; Wilson v. Wallace, 8 Serg.
& R. (Pa.) 53; Robbins v. Deveriell, 20 Wis. 142; Badger v. Dae-
nieke, 56 Wis. 678, 14 N. W. 821.

i* Ex parte Peele, 6 Ves. 602; Mead v. Tomlinson, 1 Day (Conn.)
148; Faulkner v. Brigel, 101 Ind. 329.

1^ Phillips v. Pennywit, 1 Ark. 59; Burwitz v. Jeffers, 103 Mich.
512, 61 N. W. 784; Barns v. Barrow, 61 N. Y. 39; Beakes v. Da
Cunha, 126 N. Y. 293, 27 N. E. 251.

m Piatt v. Halen, 23 Wend. (N. Y.) 456; Beakes v. Da Cunha, 126
N. Y. 293, 27 N. E. 251; Warner v. Griswold, 8 Wend. (N. Y.) 665;
Illinois Cent. R. Co. v. Owens, 53 111. 391; James T. Hair Co. v.
Thome, 27 111. App. 502; Jackson v. Bohrman, 59 Wis. 422, 18 N. W.
456; Philpott v. Bechtel, 104 Mich. 79, 62 N. W. 174.

it Leake, Cont. p. 302.

244 ACTIONS.

menl ta made payable to ane partner, although ii is a part-
aership transaction, and intended for the benefil of the firm,
such partner must sue alone I hereon,18 unless it has been
transferred by endorsement to the firm, in which case all the
partners may sue jointly.11' The facility with which negoti-
able paper may be transferred so as to authorize the trans-
feree to sue in his own name, and the very general prevalence
of statutes requiring all actions to be brought in the names
of the real parties in interest, render these rules of small
practical importance.

Where a tort results in damage to the firm as a firm, all the
partners must join as plaintiffs.20 A partner may and must
sue alone for damages suffered by him individually.21 The
same act may give rise to two causes of action, — one in favor
of all the partners jointly for their joint damage, and one in
favor of each of the partners separately to recover his indi-
vidual damage.22 In an action for defamation of the firm.
brought by all the partners jointly, no recovery can be had
for damages suffered by the partners individually.23

isMynderse v. Snook, 53. Barb. (N. Y.) 234; Driver v. Burton, 17
Q. B. 989; Bawden v. Howell, 3 Man. & G. 638; Dicey, Parties, p. 153.

i9 Pease v. Hirst, 10 Barn. & C. 122.

sopechell v. Watson, 8 Mees. & W. 691; Donnell v. Jones, 13 Ala.
490; Sindelare v. Walker, 137 111. 43, 27 N. E. 59, Burdick's Cases,
304, Mechem's Cases, 154; Medbury v. Watson, 6 Mete. (Mass.) 246;
Bigelow v. Reynolds, 68 Mich. 344, 36 N. W. 95; Taylor v. Church,
1 E. D. Smith (N. Y.) 279; Saul v. Kruger, 9 How. Prac. (N. Y.)
569.

2i Story v. Richardson, 6 Bing. N. C. 123; Rogers v. Raynor, 102
Mich. 473, 60 N. W. 980; McCoy v. Brennan, 61 Mich. 362, 28 N. W.
129; Calkins v. Smith, 48 N. Y. 614; Russell v. Lennon, 39 Wis. 570.

^Harrison v. Bevington, 8 Car. & P. 708; Duffy v. Gray, 52 Mo.
528; Wills v. Jones, 13 App. D. C. 482 (libel).

23 Booth v. Briscoe, 2 Q. B. Div. 496; Duffy v. Gray, 52 Mo. 528;
Taylor v. Church, 1 E. D. Smith (N. Y.) 279.

BY THE FIRM. 245

Same — Disqualification of One Partner to Sue.

135. All the partners joined as plaintiffs in an action at law
must be entitled to recover, or the action cannot be
maintained.

The rule is well settled that in a suit at law all the plain-
tiffs must be entitled to recover, or the suit cannot be main-
tained. Accordingly, any matter that will negative the rial it
of one of the partners to bring the suit is sufficient to defeat
an action upon a firm claim, in which all the partners must
be joined as plaintiffs.24 If, for example, one partner has
released a firm debt or entered into an accord and satisfaction,
although he may have acted in fraud of his copartners, yet a
suit at law cannot be maintained by the firm to recover such
debt.25 So, where one party has agreed with the acceptor of
a bill to provide for its payment at maturity, no action lies
by the firm against the acceptor.26 If the rule were other-

2* Wallace ¥. Kelsall, 7 Mees. & W. 264; Jones v. Yates, 9 Barn.
& C. 532, 17 E. C. L. 241; Richmond v. Heapy, 1 Starkie, 202, 2
E. C. L. 83; Johnson v. Peck, 3 Starkie, 66, 3 E. C. L. 597; Spar-
row v. Chisman, 9 Barm & C. 241, 17 E. C. L. 115; Cochran v. Cun-
ningham's Ex'r, 16 Ala. 448, 50 Am. Dec. 186; Church v. First Nat.
Bank, 87 111. 68; Blodgett v. Sleeper, 67 Me. 499; My rick v. Dame,
9 Cush. (Mass.) 248; Homer v. Wood, 11 Cush. (Mass.) 62; Farley
v Lovell, 103 Mass. 387; Greeley v. Wyeth, 10 N. H. 15; Weaver
v. Rogers, 44 N. H. 112; Craig v. Hulschizer, 34 N. J. Law, 363;
Wells v. Mitchell, 1 Ired. (N. C.) 484; Cornells v. Stanhope, 14
R. I. 97; Estabrook v. Messersmith, 18 Wis. 545; Salmon v. Davis,
4 Binn. (Pa.) 375, 5 Am. Dec. 410; Bank of Arthur v. Ellars, 48
111. App. 598.

'-■"■ Salmon v. Davis, 4 Binn. (Pa.) 375, 5 Am. Dec. 410; Myrick v.
Dame, 9 Cush. (Mass.) 248; Wallace v. Kelsall, 7 Mees. & W. 264;
Cochran v. Cunningham's Ex'r, 16 Ala. 418, 50 Am. Dec. 184; Biggs
\. Lawrence, 3 Term R. 454; Jacaud v. French, 12 East, 317.

se Richmond v. Heapy, 1 Starkie, 202, 2 E. C. L. 83; Sparrow v.
Chisman, 9 Barn. & C. 241; Johnson v. Peck, 3 Starkie, 66, 3 E. C.
L. 597.

24:6 ACTIONS.

wise, by the death of his copartners the disqualified partner
might become entitled to sue alone, which would be an absurd-
ity.27 A person cannot be allowed, as a plaintiff in a court
of law, to rescind his own act by joining his copartners with
him.28 "Whatever relief can be obtained in this class of cases
must be sought in a court of equity.29

This doctrine has been applied to cases where one partner,
for his own purposes, and in fraud of his copartners, has
wrongfully disposed of firm property, and it has been held
that no action at law will lie for the recovery of such property,
because the guilty partner, as a joint plaintiff, would have to
allege his own wrongdoing in order to recover.30 But other
courts take a contrary view, and hold that in such case the ti-
tle to the property has not passed, because the partner was not
acting within the scope of his authority, and that therefore the
guilty partner is not seeking to rescind his own act, and it is

27 Wallace v. Kelsall, 7 Mees. & W. 264. "The right of action
being joint, if one of the coplaintiffs dies, the right then accrues
to and vests in the survivor. A joint action does not abate by the
death of one of the plaintiffs, nor are the rigbts of the parties at
all changed or affected thereby in a court of law; so that, in the
present case, if the innocent partner had died, Homer, the fraudu-
lent partner, might maintain this action alone in his own name,
and thus, for his own benefit, avoid his own act by proof of his
own misconduct, and recover over again from the defendants the
very debt which has once been paid to him, and from which he
has discharged them in full." Homer v. "Wood, 11 Cush. (Mass.) 65.

2s Sparrow v. Chisman, 9 Barn. & C. 242; Jones v. Yates, 9 Barn.
& C. 532; Wallace v. Kelsall, 7 Mees. & W. 273; Homer v. Wood, 11
Cush. (Mass.) 62; Craig v. Hulschizer, 34 N. J. Law, 363.

29 Church v. First Nat. Bank, 87 111. 68; Bank of Arthur v. El-
lars, 48 111. App. 598; Cochran v. Cunningham's Ex'r, 16 Ala. 448,
EO Am. Dec. 186; Estabrook v. Messersmith, 18 Wis. 545.

so Blodgett v. Sleeper, 67 Me. 499; Farley v. Lovell, 103 Mass. 387;
Homer v. Wood, 11 Cush. (Mass.) 62; Greeley v. Wyeth, 10 N. H.
15; Weaver v. Rogers, 44 N. H. 112; Craig v. Hulschizer, 34 N. J.
Law, 363; Wells v. Mitchell, 1 Ired. (N. C.) 484; Cornells v. Stan-
hope, 14 R. I. 97; Estabrook v. Messersmith, 18 Wis. 545; Jones v.
Yates, 9 Barn. & C. 532. It is immaterial that the defendant and
the guilty partner conspired together to defraud the other partners.

AGAINST THE FIRM. 247

accordingly held that the action will lie.31 There is consider-
able confusion and conflict in the cases upon this point. Where
however, a partner acting in the course of his authority com-
mits a fraud upon a third person, it is clear that such fraud
is a perfect defense to an action by he firm seeking to take
advantage of the transaction.32

It is conceded by all the authorities that the technical ob-
jection under consideration does not apply to actions against
partners, and they may defend upon the ground that their co-
partner had no authority to bind them.33

Actions Against the Firm.

136. In actions upon a firm liability, all the partners ftfrpy?rj --*-
be joined as defendants except —
Exceptions —
(a) Dormant and nominal partners are proper, but not ,
necessary, parties defendant.

Farley v. Lovell, 103 Mass. 387; Grover v. Smith, 165 Mass. 132, 42
N. E. 555. If a bank pays out the money of a partnership to one
of the partners upon his check, in fraud of the rights of the other
partners, an action at law cannot be maintained in the firm name
against the bank, but resort must be had to a court of equity for
the relief of those partners claiming to be injured. Church v. First
Nat. Bank, 87 111. 68; Bank of Arthur v. Ellars, 42 111. App. 598.

si Rogers v. Batchelor, 12 Pet. (U. S.) 221; Burwell v. Spring-
field, 15 Ala. 273; Brewster v. Mott, 5 111. 378; Casey v. Carver, 42
111. 225; Daniel v. Daniel, 9 B. Mon. (Ky.) 195; Warder v. Newdi-
gate, 11 B. Mon. (Ky.) 174; Johnson v. Crichton, 56 Md. 108; Minor
v. Gaw, 11 Smedes & M. (Miss.) 322; Buck v. Mosley, 24 Miss. 170;
Ackley v. Staehlin, 56 Mo. 558; Forney v. Adams, 74 Mo. 138; Bil-
lings v. Meigs, 53 Barb. (N. Y.) 272; Thomas v. Pennrich, 28 Ohio
St. 55; Purdy v. Powers, 6 Pa. 492; Binns v. Waddill, 32 Grat. (Va.)
588; Dob v. Halsey, 16 Johns. (N. Y.) 34; Liberty Sav. Bank v.
Campbell, 75 Va. 534; Viles v. Bangs, 36 Wis. 131; Cotzhausen v.
Judd, 43 Wis. 213, 28 Am. Rep. 539.

82 Kilgore v. Bruce, 166 Mass. 136, 44 N. E. 108.

as Johnson v. Crichton, 56 Md. 108. And see the authorities cited
supra, this section.

24:8 ACTIONS.

(b) Under statutes making partnership obligations joint

and several, all or any of the partners may be sued.

(c) In an action for a firm tort, the partners may be sued

jointly or severally.

(d) When a contract is made in the name of one partner,

such partner may or must be sued alone in the same
cases that any other agent may or must be sued
alone upon a contract made by him for his principal.

In the absence of statute, partnership contracts are joint,
and therefore all partners should be joined in an action
against tlicm upon a firm contract.3'4 An infant partner
should be joined as a defendant.35

Dormant partners may, but need not, be joined as parties
defendant.36 A nominal partner is ordinarily a proper, but
not a necessary, party defendant.37 Under statutes making
partnership obligations joint and several, the action may be
brought against any one or all of the partners, at plaintiff's
option.

34 Page v. Brant, 18 111. 37; Sandusky v. Sidwell, 173 111. 493, 50
N. E. 1003; Smith v. Canfield, 8 Mich. 493; Le Page v. McCrea, 1
Wend. (N. Y.) 164; Weil v. Guerin, 42 Ohio St. 299.

"While each partner is liable in solido for all debts of the firm,
one partner cannot be sued alone, unless he has by some act ren-
dered himself severally liable; and each partner has a right to re-
quire all who are jointly liable with him to be made parties to a
suit upon any partnership liability." Cox v. Gille Hardware & Iron
Co., 8 Old. 483, 58 Pac. 645.

-•'Bethel v. Judge of Superior Court, 57 Mich. 379, 24 N. W. 112;
Mason v. Denison, 15 Wend. (N. Y.) 64; Slocum v. Hooker, 13 Barb.
CN. Y.) 536.

scpage v. Brant, 18 111. 37; Wright v. Herrick, 125 Mass. 154;
Bishop v. Austin, 66 Mich. 515, 33 N. W. 525; Richardson v. Farmer,
36 Mo. 35; New York Dry Dock Co. v. Treadwell, 19 Wend. (N. Y.)
525; Gal way v. Nordinger, 21 N. Y. St. Rep. 197; Brown v. Bird-
sail, 29 Barb. (N. Y.) 549; Arnold v. Morris, 7 Daly (N. Y.) 498;
Scott v. Conway, 58 N. Y. 619.

3T Dickinson v. Valpy, 10 Barn. & C. 140; Wood v. Culen, 13 Minn.

AGAINST THE FIRM. 249

In an action for a firm tort, the partners may be sued either
jointly or severally.38 This is true, whether the tort was
committed by an agent or servant of the firm in the course of
his employment,39 or by one of the partners acting within the
scope of the partnership business.40 A distinction has been
asserted in the case of torts arising from the state of the part-
nership lands, and it has been said that in such case all the
partners must be sued jointly.41

One partner may or must be sued alone on contracts made
by him on behalf of the firm in the same cases in which an
agent may or must be sued on contracts made by him on be-
half of his principal.42 An agent, and therefore a partner,
must be sued alone upon a contract under seal made in his
own name, it being a rule of the common law that the person
to be sued for breach of a contract by deed is the person 1 >y
whom the contract is expressed by the deed to be made. Parol
evidence is inadmissible to charge other persons.43 So,
where an agent or partner draws, indorses, or accepts a bill of
exchange in his own name, he must be sued thereon alone.44

394; Perry v. Randolph, 6 Smedes & M. (Miss.) 335. Compare Hatch
v. Wood, 43 N. H. 633; Purvis v. Butler, 87 Mich. 248, 49 N. W. 564.

38 See Stevens v. Faucet, 24 111. 483; Roberts v. Johnson, 58 N. Y.
613; Hutton v. Murphy, 9 Misc. 151, 29 N. Y. Supp. 70; Hyrne v.
Erwin, 23 S. C. 226; Fletcher v. Ingram, 46 Wis. 191, 54 N. W. 424.

:•■:> Roberts v. Johnson, 5S N. Y. 613; Stockton v. Frey, 4 Gill (Md.)
406; Wood v. Luscomb, 23 Wis. 287.

40 Stevens v. Faucet, 24 111. 483; Fletcher v. Ingram, 46 Wis. 191,
54 N. W. 424; Hyrne v. Erwin, 23 S. C. 226.

4i Lindl. Partn. p. 283, citing Mitchell v. Tarbutt, 5 Term R. 649.

** Dicey, Parties, p. 271.

43 Briggs v. Partridge, 64 N. Y. 357; Spencer v. Field, 10 Wend. 87;
Home Library Ass'n v. Witherow, 50 111. App. 117; Priestly v. Fer-
nie, 3 Hurl. & C. 977; Appleton v. Binks, 5 East, 148; Firemen's Ins.
Co. v. Floss, 67 Md. 403, 10 Atl. 139; Ward v. Motter, 2 Rob. (Va.)
536; Brown's Adm'r v. Johnson, 13 Grat. (Va.) 651; Gait's Ex'r v.
Calland's Ex'r, 7 Leigh (Va.) 594.

44 Dicey, Parties, p. 252; Leadbitter v. Farrow, 5 Maule & S. 345;
Sowerby v. Butcher, 2 Cromp. & M. 368; Pentz v. Stanton, 10 Wend.

250 ACTIONS.

Wh.iv the principal's name does not appear upon a bill or
note, be is not liable thereon as a party to the instrument.45
Where the person dealing with one partner gives credit to
him exclusively, with knowledge that such partner is acting
for his hrm, such partner may and must be sued alone.46
Where a partner so contracts as to bind himself personally as
well as his firm, he may be sued alone thereon, or all the part-
ners may be sued jointly.47 Where the partner contracting
was the only known principal, but the contract was in fact
made for the benefit of the firm, it being the undisclosed prin-
cipal, the other contracting party has an option to sue such
partner alone, or to sue all the partners jointly.48

Actions Between Partners.

137. No action at law lies between partners to enforce an,

obligation between the firm and a partner^xcept —
Exceptions — This rule has been held not to apply_in the_
folio-wing casesj
(a) Where the partnership was for a single completed
transaction.

(N. Y.) 276; Williams v. Robbins, 16 Gray (Mass.) 77; Bickford v.
First Nat. Bank, 42 111. 238; Anderton v. Shoup, 17 Ohio St. 125;
Moss v. Livingston, 4 N. Y. 208; Prentiss v. Foster, 28 Vt. 742; Ward
v Motter, 2 R. (Va.) 555; Eastwood v. Bain, 3 Hurl. & N. 738.

46 Dicey, Parties, p. 253.

•"'• Dicey, Parties, p. 253, citing Addison v. Gandassequi, 4 Taunt.
573, 2 Smith, Lead. Cas. (8th ed.) 392, and Thomson v. Davenport,
9 Barn. & C. 78, 2 Smith, Lead. Cas. (8th ed.) 398. See, also, Gates
v. Watson, 54 Mo. 585; Clark v. Amoskeag Mfg. Co., 62 N. H. 612;
Watt v. Kirby, 15 111. 200.

•»" Dicey, Parties, p. 254, citing Williamson v. Barton, 31 L. J.
Exch. 174, per Branwell, B.

*8 Dicey, Parties, p. 256; Leslie v. Wiley, 47 N. Y. 648; Woodhouse
v. Duncan, 106 N. Y. 533, 534, 13 N. E. 334; Hagar v. Stone, 20 Vt.
106; Sylvester v. Smith, 9 Mass. 119; Cowles v. Robinson, 11 Colo.
587.

BETWEEN PARTNERS. 251

(b) Where there is but a single unadjusted item of ac-

counts*

(c) Where the action is to recover a final balance after

termination of the partnership .

It is a well-settled rule that no action will lie in favor of
one partner against his copartner upon a demand of the firm
against such partner, or upon a liability of the firm to a part-
ner.49 The reason usually given for this rule is that, as part-
nerships rights and liabilities are joint, a partner would have
to be joined both as plaintiff and as defendant and would
thus be suing himself, which would be an anomaly.50 The
real reason for the rule is that, until an accounting and set-
tlement of the partnership affairs is had, there is no cause of
action between partners arising out of the partnership trans-
actions, except an equitable action for an accounting. The
relation of debtor and creditor does not exist between partners,
or their representatives until the partnership affairs arc
wound.. up and a balance struck.51 The only promise implied
by law from firm transactions is to pay the amount which may

*9 Duff v. Maguire, 99 Mass. 300; Haskell v. Adams, 7 Pick.
(Mass.) 59; Carpenter v. Greenop, 74 Mich. 664, 42 N. W. 276, Me-
chem's Cases, 242; Hemenway v. Burnham, 90 Mich. 227, 51 N. W.
276; Englis v. Furniss, 4 E. D. Smith (N. Y.) 587; Ferguson v.
Baker, 116 N. Y. 257, 22 N. E. 400; Newby v. Harrell, 99 N. C. 149,
5 S. E. 284, Burdick's Cases, 543; Graham v. Holt, 3 Ired. (N. C.)
300.

so See Bracken v. Kennedy, 4 111. 558; Page v. Thompson, 33 Ind.
137; Cooper v. Nelson, 38 Iowa, 442; Warren v. Stearns, 19 Pick.
(Mass.) 73; Mitchell v. Wells, 54 Mich. 127, 19 N. W. 777; Burley
v. Harris, 8 N. H. 233.

si Cole v. Fowler, 68 Conn. 450, 36 Atl. 807; Martin v. Stubbings,
1'0 111. App. 381; Russell v. Minnesota Outfit, 1 Minn. 164; Ross v.
Carson, 32 Mo. App. 148; Willis v. Barron, 143 Mo. 450, 45 S. W.
289; Towle v. Meserve, 38 N. H. 9; Wells v. Mitchell, 1 Ired. (N. C.)
484; Ives v. Miller, 19 Barb. (N. Y.) 196. "Until such final settle-
ment, the general rule is that the firm, and not the individual part-
ner, is the debtor; and in such case it cannot be said correctly that
there is a debt from one partner to the other." Sprout v. Crowley,

252 ACTIONS.

be found due after an accounting, and it follows thai no cause
of actios cau exist before such accounting.52

A private statemenl of account between the parties is suf-
ficient, and ii has Keen deemed immaterial in such case that
partnership affairs with third persons were unsettled,5 2a and
;i sale by one partner to the other of all his interest is a virtual
accounting.5211

The c ■liimon-law action of account or account rendered will
lie between partners, but this remedy has been practically
superseded by a bill in equity for an account.

Exceptions to Rule.

The rule that no action at law lies between partners upon
partnership transactions has been held not_to apply to a part-
nership for a single completed transaction.53 Xor to cases
where there is a single unadjusted item of account.54 In
Massachusetts, an action at law may be maintained to recover
a linal hahinflfl after the term jnj ti * of the panncr-hip in aJ]
cases where the recovery will effect a final settlement between
\\\r partners^5

30 Wis. 191; citing Ives v. Miller, 19 Barb. (N. Y.) 196, and cases
cited.

B2Mickle v. Peet, 43 Conn. 66; Bank of British North America v.
Delafleld, 126 N. Y. 410, 27 N. E. 797; Crater v. Bininger, 45 N. Y.
545.

,62a McDowell v. North, 24 Ind. App. 435, 55 N. E. 789. And see
Burns v. Nottingham, 60 111.

62b Schlicher v. Vogel, 59 N. J. Eq. 351, 47 Atl. 448; Cobb v. Bene-
dict, 27 Colo. 342, 62 Pac. 222.

Myers v. Winn, 16 111. 135; Lawrence v. Clark, 9 Dana (Ky.)
257; Rankin v. Fairley, 29 Mo. App. 587; Kutz v. Dreibelbis, 126 Pa.
335, 17 Atl. 609; Meason v. Kaine, 63 Pa. 335. Contra, Attwater v.
Fowler, 1 Hall (N. Y.) 180; Price v. Drew, 18 Fla. 670.

r,4 Purvines v. Champion, 67 111. 459; Farwell v. Tyler, 5 Iowa,
535; Fanning v. Chad wick, 3 Pick. (Mass.) 420; Bambrick v. Simms,
132 Mo. 49, 33 S. W. 445; Byrd v. Fox, 8 Mo. 574; Arnold v. Arnold,
•90 N. Y. 583.

55 Starbuck v. Shaw, 10 Gray (Mass.) 494; Sikes v. Work, 6 Gray

BETWEEN PARTNERS. 253

Same — Actions Between Firms With a Common
Member.

138. No^ action at law lies between two firms with a com-
mon member.

The same reasons that prohibit actions at law between part-
ners of the same firm forbid actions at law between two firms
with a common member.56 It has sometimes been held that
such actions can be maintained under the Code, because the
distinctions between actions at law and siiits_ in equity have
been abolished.57 But is is believed that the better view is
that, even in equity, or unrip r the Cnrl^ the only action that
can be maintained between firms with a common member, or
between partners of the same firm, is an action for an ac-
counting

(Mass.) 434; Bond v. Hays, 12 Mass. 34; Capen v. Barrows, 1 Grar
(Mass.) 376; Shattuck v. Lawson, 10 Gray (Mass.) 405.

scHall v. Kimball, 77 111. 161; Haven v. Wakefield, 39 111. 509;
Crosby v. Timolat, 50 Minn. 171, 52 N. W. 526; Taylor v. Thompson,
176 N. Y. 168, 68 N. E. 240; Beacannon v. Liebe, 11 Or. 443, 5 Pac.
273; Rogers v. Rogers, 5 Ired. Eq. (N. C.) 31; Tassey v. Church, 6
Watts & S. (Pa.) 467.

sTCole v. Reynolds, 18 N. Y. 74; Mangels v. Shaen, 21 App. Div.
507, 48 N. Y. Supp. 526; Schnaier v. Schmidt, 59 Hun, 625, 13 N. Y.
Supp. 725, affirmed 128 N. Y. 683, 26 N. E. 149; Beacannon v. Liebe,
11 Or. 445, 5 Pac. 273.

■w Page v. Thompson, 33 Ind. 137; Russell v. Minnesota Outfit, 1
Minn. 162; Crosby v. Timolat, 50 Minn. 171, 52 N. W. 526; Englis
v. Furniss, 4 E. D. Smith (N. Y.) 587; Rogers v. Rogers, 5 Ired. Eq.
(N. C.) 31. In Pennsylvania, it is expressly provided by statute that
actions at law may be maintained between firms having a common
member, but even this statute has not removed the inherent objec-
tion to such suits, nor obviated the necessity of an accounting. See
Tassey v. Church, 6 Watts & S. (Pa.) 465: Pennock v. Swayne, 6
Watts & S. (Pa.) 239; Allen v. Erie City Bank, 57 Pa. 140.

254 ACTIONS.

Same — Actions on Individual Obligations.

139. An action _at law will lie between partners upon jn_-^
dividual obligations.

The rule forbidding actions between partners upon firm
transactions has no application, of course, to cases where the
right and liabilities sought to be enforced are not firm rights
and liabilities, but are the individual rights and liabilities of
the partners. The mere fact that the transaction is in some
way connected with the partnership does not constitute it a
partnership transaction, within the meaning of the rule. Af-
ter a final settlement and ascertainment of a balance, the
rights and liabilities thereunder are individual rights and lia-
bilities, and a partner may maintain an action at law against
his copartner to recover his share.59 Actions at law may be
maintained upon individual contracts made between the part-
ners either before, after, or during the existence of the part-
nership.60

59 Purvines v. Champion, 67 111. 459; Thompson v. Smith, 82 Iowa,
598, 48 N. W. 988; Miner v. Lorman, 59 Mich. 480, 26 N. W. 678;
Bambrick v. Simms, 132 Mo. 48, 33 S. W. 445; Arnold v. Arnold, 90
N. Y. 583; Blanchard v. Jefferson, 13 App. Div. 314, 43 N. Y. Supp.
152; Rose v. Bradley, 91 Wis. 619, 65 N. W. 509.

eopenn v. Stone, 10 Ala. 209; Wells v. Carpenter, 65 111. 447;
Berry v. DeBruyn, 77 111. App. 359; Douthit v. Douthit, 133 Ind. 26;
Y/illiams v. Henshaw, 11 Pick. (Mass.) 79; Ryder v. Wilcox, 103
Mass. 24, Burdick's Cases, 525; Kinney v. Robison, 52 Mich. 389,
18 N. W. 120; Crater v. Bininger, 45 N. Y. 545; Bank of British
North America v. Delafield, 126 N. Y. 410, 27 N. E. 797. Thus, an
action lies for fraud in inducing the plaintiff to enter into partner-
ship with the defendant. Hale v. Wilson, 112 Mass. 444; Rice v.
Culver, 32 N. J. Eq. 601; More v. Rand, 60 N. Y. 208. Or to recover
money paid under an executory agreement to form a partnership
which has been broken. Lampert v. Ravid, 33 Misc. 115, 67 N. Y.
Supp. 82. A partner may maintain an action at law against his
former co-partner to recover price of his interest, sold to the latter.

BETWEEN PARTNERS. 255

Liability of one partner to another for breach of the part-
nership agreement is not an individual indebtedness within
this rule,603- but breach of an agreement to form a partnership
is.60D Nor is the claim of a partner to contribution or indem-
nity for money advanced for finn purposes ordinarily deemed
individual,600 but one partner may advance the share of an-

Burney v. Boone, 32 Ala. 486; Edens v. Williams, 36 111. 252. An
action at law lies for breach of an agreement to enter into partner-
ship with the plaintiff. Hill v. Palmer, 56 Wis. 123, 14 N. W. 123,
Mechem's Cases, 249. An action at law lies for a wrongful dissolu-
tion of a partnership in breach of the partnership agreement. Jewett
v. Brooks, 134 Mass. 505; Bagley v. Smith, 10 N. Y. 489; Dart v.
Laimbeer, 107 N. Y. 664, 14 N. E. 291. An action lies upon a prom-
issory note between partners as individuals. Berry v. DeBruyn, 77
"ill. App. 359; Mitchell v. Wells, 4 Mich. 127; First Nat. Bank v.
Wood, 128 N. Y. 35, 27 N. E. 1020. "One partner may sue another
on a note given to him for a sufficient consideration though growing
out of partnership business." Hey v. Harding (Ky.), 53 S. W. 33.
An action at law lies to recover money advanced to launch the part-
nership. Bull v. Coe, 77 Cal. 54, 18 Pac. 808; Wright v. Eastman,
44 Me. 220; Wetherbee v. Potter, 99 Mass. 354; Bates v. Lane, 62
Mich. 132, 28 N. W. 753; Smith v. Kemp, 92 Mich. 357, 52 N. W. 639;
Gordon v. Boppe, 55 N. Y. 665. Partners may, by express agree-
ment, separate a particular transaction from the firm accounts, and
transform it into individual rights and liabilities, whereon an ac-
tion at law will lie. Stone v. Aldrich, 43 N. H. 53; Ryder v. Wilcox,
103 Mass. 24, Burdick's Cases, 525; Harris v. Harris, 39 N. H. 52;
Emery v. Wilson, 79 N. Y. 78. One partner may sue his copartner
at law to recover damages for individual losses suffered by him
from the latter's tort. Newsom v. Pitman, 98 Ala. 526, 12 So. 412;
Sweet v. Morrison, 103 N. Y. 235, 8 N. E. 396. Where a partner
agreed in the articles of partnership to pay an equivalent for cer-
tain services to be rendered in the business by the others and after-
wards adjusted the amount, and expressly promised to pay it, it
was held that an action at law lay upon the promise. Paine v.
Thacher, 25 Wend. (N. Y.) 450.

coa Miller v. Freeman, 111 Ga. 654, 36 S. E. 961.

eobTevis v. Carter, 23 Ky. L. R. 1270, 65 S. W. 17; Lampert v.
Ravid, 33 Misc. 115, 67 N. Y. Supp. 82; Buckmaster v. Gowen, 81
111. 153.

6oc Sebastian v. Booneville Academy Co., 22 Ky. L. R. 186, 56 S. W.
810; Worley v. Smith, 26 Tex. Civ. App. 270, 63 S. W. 903.

256 ACTIONS.

other under such circumstances thai it is to be deemed an in-
dividual loan which may be sued on at law during the con-
tinuance of the partnership.60*5

1M U
v , Suits in Equity.

140. As a general rule, the remedy_between partners, until
final settlement of accounts, is exclusively in equity.

141. The granting; of equitable remedies in suits between
partners is governed by ordinary considerations.

The jurisdiction of equity over controversies between part-
ners depends, as in other cases, upon the absent of an nr1ft=_,
giiate remedy atj^wj but owing to the intimate and compli-
cated nature of the partnership relation, the remedy at law is
seldom adequate, and consequently the jurisdiction over part-
nership controversies is almost cxelusivly in equity.61 As
has been seen, it is only in exceptional cases that an action at
law Avill lie between partners upon a partnership transaction.

The equity jurisdiction is most frequently invoked to secure
a dissolution, accoujithur and settlement of the .aifairs of the
firm.

The granting of equitable remedies, such as injunction,
specific performance, and the appointment of receivers, is in
the main governed by general considerations not peculiar to
partnership ; but there are three rules governing the action of
a court of equity in this regard which must.be noticed.

The first rule is that equity will not undertake the manage-
ment of a going concern. Formerly the rule was very strictly

ood Farmer v. Putnam, 35 Misc. 32, 70 N. Y. Supp. 179.

01 Mudd v. Bates, 73 111. App. 576; Wycoff v. Purnell, 10 Iowa,.
332, Mechem's Cases, 238; Course v. Prince, 1 Mill (S. C.) 413;
Knowlton v. Reed, 38 Me. 246; Blackwell v. Rankin, 7 N. J. Eq. 152;
Cunningham v. Littlefield, 1 Edw. Ch. (N. Y.) 104.

~* „ ^ ' ■

i

SUITS IN EQUITY. 257

enforced that a court of equity would not interfere at all un-
less a dissolution was sought or had already taken place.
Thus, under the old rule, if a dissolution was not sought, the
court would not decree a partnership account, nor restrain a
partner from infringing the partnership articles. This rule
has been much relaxed in modem practice, but even now a
court will not take the management of a going concern into its
own hands.62 There are many cases now in which an in-
junction,63 or an account 64 will be decreed, although no dis-
solution has taken place, and none is sought.

The second rule above mentioned is that a court of equity
will not interfere in matters of merely internal regulation.

The third rale is that equity will not interfere at the in-
stance of a person who has been guilty of laches. This is a
general principle, applicable to all suits in equity, but there
is a peculiar propriety in enforcing it in partnership cases.
Especially where the alleged partnership was in a speculative

esLindl. Partn. p. 465 et seq.; England v. Curling, 8 Beav. 129, 19
Eng. Rul. Cas. 598; Roberts v. Eberhardt, Kay, 148, 19 Eng. Rul.
Cas. 607. Where tenants in common of a mine have been working
it in partnership, or where the mine itself is the partnership prop-
erty, the court will not appoint a receiver or manager at the in-
stance of one of the partners, in a suit which does not seek to dis-
solve the partnership. Roberts v. Eberhardt, Kay, 148, 23 L. J. Ch.
201, 19 Eng. Rul. Cas. 607.

«s Pirtle v. Penn, 3 Dana (Ky.) 247, 28 Am. Dec. 70, Mechem's
Cases, 259; Van Kuren v. Trenton Locomotive & Machine Mfg. Co.,
13 N. J. Eq. 302.

s* An account may be had without a dissolution in the following
cases: (1) Where one partner has sought to withhold from his co-
partner the profit arising from some secret transaction. (2) Where
the partnership is for a term of years, still unexpired, and one part-
ner has sought to exclude or expel his copartner, or drive him to a
dissolution. (3) Where the partnership has proved a failure, and
the partners are too numerous to be made parties to the action, and
a limited account will result in justice to them all. (4) Where there
is an agreement for periodical accountings, or accountings as to dis-
tinct transactions. Lindl. Partn. p. 495; George, Partn. p. 337; Pat-

17

258 ACTIONS.

venture, ;i pci-soii will not bo permitted to lie idly by until it
has proven successful, ami then claim a partner's share.05

Specific Performance.

It i- a general rule that equity will not decree specific per-
formance of an agreemenl In enter into and carry en a part-
nership.66 "Il is impossible to make persons who will net
concur carry on a business, jointly, for their own common ad-
vantage."67

AYhere no fixed term of duration is provided for in the part-
nership agreement, a decree of specific performance would be
nugatory, for the partners could at once dissolve it. Accord-
ingly, in such cases, specific performance will not generally
be decreed.68

terson v. Ware, 10 Ala. 444; Traphagen v. Burt, 67 N. Y. 30; Wadley
v. Jones, 55 Ga. 329.

«s See, generally, Hoyt v. Sprague, 103 U. S. 613; Groenendyke v.
v. Coffeen, 109 111. 325; Norway v. Rowe, 19 Ves. 144; Clegg v. Ed-
monson, 8 De Gex, M. & G. 787. In a business of a highly speculative
character, a partner who stands by and takes no decided step for
assertion of his rights will not be allowed, after a considerable pe-
riod, and when the success of the venture is assured by the exertions
of the remaining partners, to claim his share of profits as a partner.
Norway v. Rowe, 19 Ves. 144, 19 Eng. Rul. Cas. 556; Rule v. Jewell,
18 Ch. Div. 660, 29 Weekly Rep. 755, 19 Eng. Rul. Cas. 561.

co Scott v. Raymen, L. R. 7 Eq. 112.

67 England v. Curling, 8 Beav. 138, 19 Eng. Rul. Cas. 604. See,
also, Satterthwait v. Marshall, 4 Del. Ch. 337, 354; Reed v. Vidal, 5
Rich. Eq. (S. C.) 289; Meason v. Kaine, 63 Pa. 335. In Buck v.
Smith, 29 Mich. 166, the court said (at page 171): "It is extremely
plain that the court cannot assume to enforce the performance of
daily prospective duties, or supervise or direct in advance the course
or conduct of one who is to control and manage in the interest of a
firm in which he is to stand as a member, and where, too, the stip-
ulated arrangement, as plainly set forth, contemplates that his per-
sonal skill and judgment shall be applied and govern according to
the shifting needs of property and business. No court is competent
to execute such an arrangement."

88 Morris v. Peckham, 51 Conn. 128; Somerby v. Buntin, 118 Mass.

SUITS IN EQUITY. 259

The court may decree specific performance of an agreement
to execute a formal instrument of partnership, and, so far as
it can make its jurisdiction effective, by injunction or other-
wise, will give relief in substantially carryhg out the agree-
ment.69 Thus, where it is necessary in order to secure to a
partner the interests in property to which, by the partnership
agreement, he is entitled, specific performance to that extent
may be decreed, even of an agreement to form a partnership at
will.70 And, in general, an agreement to convey property
rights with which the partnership is to deal, or land on which
the partnership buildings are to be erected, Avill be specifically
enforced where the agreement has been relied and acted on.

279, 287; Buck v. Smith, 29 Mich. 166. See, however, Tillar v. Cook,
77 Va. 477, 481.

co England v. Curling, 8 Beav. 129, 19 Eng. Rul. Cas. 598; Roberta
v. Eberhardt, Kay, 148, 19 Eng. Rul. Cas. 607. "But if the parties in-
sist on having a declaration of their rights, the court has, over and
over again, entertained the jurisdiction, and must entertain the ju-
risdiction, unless some one or two of several partners are to be per-
mitted to do just as they like with the partnership rights and inter-
est." England v. Curling, 8 Beav. 138, 19 Eng. Rul. Cas. 605.

to Somerby v. Buntin, 118 Mass. 279; Whitworth v. Harris, 40
Miss. 483.

CHAPTER XI.
DISSOLUTION.

142. How Effected.*

143. By Operation of Law>

144. By Act of Parties. '

145. By Decree of Court, i

146. Grounds for Dissolution.'

147. Rights, Powers, and Liabilities after Dissolution.

148. Of Partners Generally.

149. Of Liquidating Partners.

150. Of surviving partners.
151-152. Of Estate of Deceased Partner.

153. Of Creditors.

How Effected.

142. A partnership may be dissolved in three ways, viz. —

(a) By operation of law.

(b) Bv act of parties.

y (c) By decree of court.

Same — By Opeeation of Law.

143. A partnership is dissolved by operation of law upon
the happening of either of the following events :

(a) Death of partner

(b) Insolvency or bankruptcy of partner or firm.

(c) Marriage of feme sole partner, except where her dis^

abilities have been removed by statute^

(d) Events rendering continuance of partnership illegal^

HOW EFFECTED. 261

Death of a Partner.

"Whether a partnership is formed to continue for a definite
term or not. the death of one partner, ipso facto, dissolves the
partnership by npprarian ^J[^y.tpg to. all the partners.1 It is
■ not unusual to provide in the original articles or otherwise for
. a continuance of the partnership business, and in such case it
is sometimes loosely said that the death of a partner does not
dissolve the partnership.2 But this is inaccurate. If the
business is carried on under such arrangement, there is in
effect and in law a new partnership.3

i Pitkin v. Pitkin, 7 Conn. 307; Remick v. Emig, 42 111. 342; Nel-
I son v. Hayner, 66 111. 487; Oliver v. Forrester, 96 111. 315; Dyer v.

Clark, 5 Mete. (Mass.) 562, Ames' Cas. 251; Ames v. Downing, 1

Bradf. (N. Y.) 321; Dexter v. Dexter, 43 N. Y. App. Div. 268, 60 N.

Y. Supp. 371; Stewart v. Robinson, 115 N. Y. 328, 22 N. E. 160, 163;

Durant v. Pierson, 124 N. Y. 444, 26 N. E. 1095, Mechem's Cases,

403; Egberts v. Wood, 3 Paige Ch. (N. Y.) 517; Griswold v. Wad-
' dington, 15 Johns. (N. Y.) 57, Burdick's Cases, 544; Van Kleeck v.

McCabe, 87 Mich. 599, 49 N. W. 872; Roberts v. Kelsey, 38 Mich. 602;

Exchange Bank v. Tracy, 77 Mo. 594; Crawshay v. Maule, 1 Swanst.

520, 19 Eng. Rul. Cas. 476; Ex parte Ruffin, 6 Ves. 119, Burdick's

Cases, 192, 19 Eng. Rul. Cas. 628.

2 Butler v. American Toy Co., 46 Conn. 136; Duffield v. Brainard,
45 Conn. 424; Rand v. Wright, 141 Ind. 226, 39 N. E. 447, Burdick's
Cases, 266; Roberts v. Kelsey, 38 Mich. 602; Jenness v. Carleton, 40
Mich. 343; Blodgett v. American Nat. Bank, 49 Conn. 9; Edwards v.
Thomas, 66 Mo. 468; Wild v. Davenport, 48 N. J. Law, 129, 7 Atl.
295. See Bates, Partn. § 598 et seq. See, also, expressions of rule
in cases cited in preceding note. In Wild v. Davenport, 48 N. J.
Law, 129, 7 Atl. 295, the court say, at page 136: "A provision in ar-
ticles of partnership that, on the death of a partner, his executor or
personal representative, or some other person, shall be entitled to
the place of a deceased partner in the firm, with the capital of the
deceased in the firm business, or some part of it, is binding upon
the surviving partner to admit the executor, personal representative,
or nominee of the deceased partner, but does not bind the latter to
come in. They have an option to come in or not, and a reasonable
time within which to elect." To the same effect are Berry v. Folkes,

JjO_Miss. 576; Edgar v. Cook, 4 Ala. 588.

3 Hoard v. Clum, 31 Minn. 186, 17 N. W. 275; Mattison v. Farnham,

262 DISSOLUTION.

Insolvency or Bankruptcy.

Technical insolvency or bankruptcy of either an individual
partner or of the linn, as disl inguished from a more inability
to pay debts^ works a dissolution of the partnership by oper-
ation of law; and an assignmenl for the benefil of creditors
has the same effect.4 Tf has been held thai a compromise
with creditors and continuation of business after a genera]
assignmenl prevents dissolution,48, though it would be more
accurate to consider such an arrangement as the formation of
a new partnership. lb

Marriage of Female Partner.

At common law, the marriage of a female partner operated
as ;i dissolution, but un^ej^statutes authorizing married
women to contract and hold property as if sole, marriage does
not have this effect.5 A partnership between a man and a wo-
man is dissolved by their marriage to each other.6

44 .Minn. 95, 46 N. W. 347; Wilcox v. Derickson, 168 Pa. 331, 31 Atl.
1080.

4McNutt v. King-, 59 Ala. 597; Wells v. Ellis, 68 Cal. 243; Gordon
v. Freeman, 11 111. 14; Talcott v. Dudley, 4 Scam. (111.) 427; Arnold
v. Brown, 24 Pick. (Mass.) 89, 35 Am. Dec. 296; Eustis v. Bolles,
146 Mass. 413, 4 Am. St. Rep. 327; Atwood v. Gillett, 2 Doug. (Mich.)
206; Halsey v. Norton, 45 Miss. 703, 7 Am. Rep. 745; Marquand v.
New York Mfg. Co., 17 Johns. (N. Y.) 525; Welles v. March, 30 N.
Y. 344; Havens v. Hussey, 5 Paige, Ch. (N. Y.) 30; Siegel v. Chidsey,
28 Pa. 297; McKelvy's Appeal, 72 Pa. 409; Ex parte Ruffin, 6 Ves.
126, 19 Eng. Rul. Cas. 628. By an adjudication in bankruptcy, the
partner becomes civiliter mortuus so far as the partnership is con-
cerned. Talcott v. Dudley, 4 Scam. (111.) 427.

^a Taylor v. Hotchkiss, 81 App. Div. 470, 80 N. Y. Supp. 1042.

•»b Atwood v. Gillett, 2 Doug. (Mich.) 206.

s Brown v. Chancellor, 61 Tex. 437, 445. Query: Is notice of dis-
solution necessary? See Bates, Partn. § 588.

« Bassett v. Shepardson, 52 Mich. 3, 17 N. W. 217, Burdick's Cases,
553. But see Burney v. Savannah Grocery Co., 98 Ga. 711, 25 S. E.
915, Burdick's Cases, 11.

HOW EFFECTED. 263

Business of Partnership Becoming Unlawful.

A partnership is in every case dissolved by the happening
of an event which 'males' it unlawful f or the business of tbj3
firm to be carried on, or for the members of the firm to carry
it on in_.partner.ship.7 Thus, where the partners are residents
of different countries, the breaking out of war between such
countries operates as a dissolution.8

Same — By Acts of

144. A partnership may be dissolved by the act of some or
all of the partners. It is so dissolved in the following
cases, viz.:

(a) Where the stipulated term has expirerlT or the object

ofthe partnership has heen accomplished.

(b) Where the parties mutually agree to a dissolution.

#

(c) Whereone partner gives notice of dissolution.

(d) Where there is a__chanjrg in memberghjp. .

(e) Wher^_onepartner's share has been_trajisferred-.

Expiration of Term or Accomplishment of Object.

Where a partnership is formed for a specified term, and
that lerm has expire!, (lie partnership is dissolved without
any further action upon the part of the partners.1' Xotice of
dissolution is necessary to relieve the partners from liability
for subsequent acts of their former partners, except in the
case of persons having notice of the term.10 The partnership

1 Pollock, Partn. art. 1. See, also, Esposito v. Bowden, 7 El. & Bl.

763.

a

s Griswold v. Waddington, 15 Johns. (N. Y.) 57, Burdick's Cases,
544, 16 Johns. (N. Y.) 438; Buchanan v. Curry, 19 Johns. (N. Y.)
137; Woods v. Wilder, 43 N. Y. 164; Taylor v. Hutchison, 25 Grat.
<Va.) 536; Matthews v. McStea, 91 U. S. 7.

o Schlater v. Winpenny, 75 Pa. 321; Ex parte Ruffin, 6 Ves. 126,
Burdick's Cases, 192, 19 Eng. Rul. Cas. 628.

loRetchum v. Clark, 6 Johns. (N. Y.) 144; Holt v. Simmons, 16

2Q4 DISSOLUTION.

may, of course, be continued after the expiration of the orig-
inal term, by express or tacit agreement.11

Where the partnership was for the accomplishment of
some particular transaction or venture, upon the completion
thereof the partnership is at an end.12

Dissolution by Mutual Consent.

By mutual consent of all the partners, a partnership may
he dissolved al any time, whether it was formed for an indef-
inite time, or a fixed period. .V specific agreement is ao1
necessary to dissolve a partnership — words or acts implying
an intention to dissolve are enough.14 Abandonment of the
partnership business is evidence of dissolution.15 Where both
parties refuse further to perform the partnership agreement,

Mo. App. 97. See, also, ante, § 120, "Notice of Dissolution." The
expiration of a partnership by lapse of time revokes a power of at-
torney to conduct the business of the firm, as to one who had notice
of the term. Schlater v. Winpenny, 75 Pa. 321.

ii Mifflin v. Smith, 17 Serg. & R. (Pa.) 165.

12 Bank of Montreal v. Page, 98 111. 109; Spurck v. Leonard, 9 111.
App. 174; Bohrer v. Drake, 33 Minn. 408, 23 N. W. 840; Jones v.
Jones, 18 Ohio Cir. Ct. 260, 10 Ohio Dec. 71; Sims v. Smith, 11 Rich.
(S. C.) 565.

is Phelps v. State, 109 Ga. 115, 34 S. E. 210; Bank of Montreal v.
Page, 98 111. 109; Richardson v. Gregory, 126 111. 166, 18 N. E. 777;
Ligare v. Peacock, 109 111. 94; Wantling v. Howarth, 65 111. App. 598;
Gould v. Banks, 8 Wend. (N. Y.) 562; Ex parte Ruffin, 6 Ves. 119,
Burdick's Cases, 192, 19 Eng. Rul. Cas. 628.

i* Richardson v. Gregory, 27 111. App. 621, wherein it was held that
a dissolution is effected by merely ceasing to do business, and divid-
ing the partnership property. Where it is agreed that one who is to
furnish the capital is to have the right to withdraw the capital at
any time on consent of another, the partnership is dissolved by such
withdrawal. Smith v. Vanderberg, 46 111. 34. Loss of the whole
capital of a partnership, where there has been no provision made for
doing business on credit, works a dissolution of the partnership.
Van Ness v. Fisher, 5 Lans. (N. Y.) 236.

is Spurck v. Leonard, 9 111. App. 174; Ligare v. Peacock, 109 111.
94. Compare First Nat. Bank v. Strait, 75 Minn. 396, 78 N. W. 101.

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HOW EFFECTED. 205

the partnership is effectually dissolved.16 Dissolution may
be shown by a sale of the whole property and business, al-
though the stipulated term has not expired.17

Dissolution by Act of One Partner.

Where a partnership is formed, but no definite time is fixed

.nil, im .nr -■*■ |i lllil^MtillWH ' ii ''"" — " ' '"' '- r-nmiir i'r ti - ■ -f

for its continuance, it is a partnership at will, and any part-

ner may dissolve it at his pleasure, 1S by merely notifying his
partners that the partnership between him and them is dis-
solved.19 A partnership for the accomplishment of certain
definite objects, but not expressly specifying any time for its
■continuance, is not a partnership at will, within the meaning
of this rule, but it is regarded as a partnership, to continue

A partnership is dissolved when it ceases to do the business for
which it was organized. Potter v. Tolbert, 113 Mich. 486, 71 N. W.
S49, Burdick's Cases, 367.

io Ligare v. Vanderburg, 46 111. 34; Appeal of Haeberly, 191 Pa.
239, 43 Atl. 207; Coggswell v. Coggswell (N. J. Eq.), 40 Atl. 213;
In re Account of Wells, 4 Lack. Leg. News (Pa.) 135.

is Howell v. Harvey, 5 Ark. 270, Mechem's Cases, 354; Lawrence
v. Robinson, 4 Colo. 567; Blake v. Sweeting, 121 111. 67, 12 N. E. 67;
Carlton v. Cummins, 51 Ind. 478; Whiting v. Leakin, 66 Md. 255,
7 Atl. 688; Fletcher v. Reed, 131 Mass. 312, Burdick's Cases, 554;
Walker v. Whipple, 58 Mich. 476, 25 N. W. 472; Berry v. Folkes, 60
Miss. 576; McElvey v. Lewis, 76 N. Y. 373; McMahon v. McClernan,
10 W. Va. 419; Loorya v. Kupperman, 25 Misc. 518, 54 N. Y. Supp.
1005; Skinner v. Tinker, 31 Barb. (N. Y.) 333; Pine v. Ormsbee, 2
Abb. Prac. (N. S.; N. Y.) 375; Buck v. Smith, 29 Mich. 166, Mechem's
Cases, 266; Crawshay v. Maule, 1 Swanst. 508, 19 Eng. Rul. Cas. 473;
Featherstonhaugh v. Fenwick, 17 Ves. 307, 19 Eng. Rul. Cas. 577;
Peacock v. Peacock, 16 Ves. 49, 19 Eng. Rul. Cas. 549.

io Blake v. Sweeting, 121 111. 67, 12 N. E. 67; Avery v. Craig, 173
Mass. 110, 53 N. E. 153; Eagle v. Bucher, 6 Ohio St. 295, 67 Am. Dee.
342; Abbot v. Johnson, 32 N. H. 9. A partnership is dissolved, un-
less equity can interfere, where one of the firm takes exclusive pos-
sion, and gives notice of dissolution to the others and the public.
Solomon v. Kirkwood, 55 Mich. 256, 21 N. W. 336, Burdick's Cases,
554, Mechem's Cases, 361.

266 DISSOLUTION.

until its purpose is accomplished, or the impracticability
thereof demonsl rated.20

Where the partnership is for a fixed term, the American
authorities are by ao means uniform as to whether one part-
ner can effect a dissolution at will. That lie cannot was
clearly Judge Story's opinion, as appears from the following
passage: "In cases where the partnership is by the agree-
ment to endure for a Limited period of time, the question
"whether it may, within the period, be dissolved by the men1
act or will of one of the partners, without the consent of all
the others, dues not seem to he absolutely and definitely settled
in our jurisprudence, although it would not seem, upon prin-
ciple, to admit of any real doubt or difficulty. Whenever a
stipulation is positively made that the partnership shall en-
dure for a fixed period, or for a particular adventure or voy-
age, it would seem to be at once inequitable and injurious to
permit any partner, at his mere pleasure, to violate his en-
gagement, and thereby to jeopard, if not sacrifice, the whole
objects of the partnership; for the success of the whole under-
taking may depend upon the due accomplishment of the ad-
venture or voyage, or the entire time may be required to put
the partnership into beneficial operation. It is no answer to
say that such a violation of the engagement may entitle the
injured partners to a compensation in damages, for, indepen-
dent of the delay and uncertainty attendant upon any such
mode of redress, it is obvious that the remedy may be — nay,
must be — in many cases utterly inadequate and unsatisfac-
tory. If there be any real and just ground for the aban-
donment of the partnership, a court of equity is competent to
administer suitable redress. Bui that is exceedingly differ-
ent from the right of the partner, sua sponte, from mere cap-
rice, or at his own pleasure, to dissolve the partnership. In

-"Burgess v. Badger, 124 111. 288, 14 N. E. 850; Pearce v. Ham,
113 U. S. 585; Walker v. Whipple, 58 Mich. 476, 25 N. W. 472.

HOW EFFECTED. 267

short, the opposite doctrine, although perhaps in some meas-
ure countenanced by the Roman Law, is founded upon rea-
sons exceedingly artificial, if not indefensible." 21 These
views have been adopted by some courts.22 But the great
weight of authority is to the effect that there is no such thing
as an indissoluble partnership, and that, even where the part-
ners have contracted for a definite term, any partner may of
his own will dissolve the partnership, with or without cause,
at any time.23 Of course, if he should dissolve the partner-
ship before the expiration of the agreed term, he would be
liable in damages to his copartners for breach of contract,24
unless he had a valid legal excuse for not performing his con-
tract.25 But the partnership would nevertheless be dissolved,
whether rightfully so or not.26 It is manifestly impractic-
al Story, Partn. (7th Ed.) § 278.

22 Smith v. Mulock, 1 Rob. (N. Y.) 569, 1 Abb. Prac. (N. S.; N. Y.)
374; Cole v. Moxley, 12 W. Va. 730; Hannaman v. Karrick, 9 Utah,
236, 33 Pac. 1039; Pearpoint v. Graham, 4 Wash. C. C. 232, Fed. Cas.
No. 10,877. See, also, Hartman v. Woehr, 18 N. J. Eq. 383. One part-
ner cannot take forcible possession of the firm property, and thereby
effect a dissolution of the partnership before expiration of the time
specified in the agreement. Hannaman v. Karrick, 9 Utah, 236, 33
Pac. 1039.

-'•"•Howell v. Harvey, 5 Ark. 270, Mechem's Cases, 354; Walker v.
Whipple, 58 Mich. 476, 25 N. W. 472; Bagley v. Smith, 10 N. Y. 489,
19 How. Prac. (N. Y.) 1; Slemmer's Appeal, 58 Pa. 168; Kinloch v.
Hamlin, 2 Hill (S. C.) 19.

24 Blake v. Dorgan, 1 G. Greene (Iowa) 537; Monroe v. Conner, 15
Me. 178; Solomon v. Kirkwood, 55 Mich. 256, 21 N. W. 336, Bur-
dick's Cases, 554, Mechem's Cases, 361; Skinner v. Dayton, 19 Johns.
(N. Y.) 513; Slemmer's Appeal, 58 Pa. 168; Mason v. Connell, 1
Whart. (Pa.) 381. Loss of profits which plaintiff would have real-
ized is a proper element of damage. Bagley v. Smith, 10 N. Y. 489,
Mechem's Cases, 251.

-•" As to grounds for dissolution, see infra, § 146.
ze in Karrick v. Hannaman, 168 U. S. 328, 335, Gray, J., thus states
the prevailing American doctrine, though the court was not called
upon to decide the point: "No partnership can efficiently or bene-
ficially carry on its business without the mutual confidence and co-

268 DISSOLUTION.

able for a courl to compel persons to become or remain part-
ners who are unwilling to do so. Such a partnership could
not be conducted with profit to those concerned, and would bo
certain to resull in dissensions and Litigation. As has been
seen, a court of equity will not take charge of a going con-
cern, and will not ordinarily decree specific performance of a
contract of partnership.

Change in Membership.

"Each change of partners, whether by the addition of a
new member, or the death or retirement of an old one, or the
substitution of a new for an old member, is a dissolution as
to nil partners, and not merely as to the one who has retired
or died, and whether by consent or previous agreement or
otherwise, and if the business is continued, it is by a new
partnership, whether the name be the same or not. ISTo mat-
ter how numerous the changes without apparent break in the
continuity of the business, at each change an exiting firm
dissolves, and a new one is formed."27 A change in name

operation of all the partners. Even when, by the partnership arti-
cles they have covenanted with each other that the partnership shall
continue for a certain period, the partnership may be dissolved at
any time, at the will of any partner, so far as to put an end to the
partnership relation, and to the authority of each partner to act for
all,' but rendering the partner who breaks his covenant liable to an
action at law for damages, as in other cases of breaches of contract.
. . . According to tbe authorities just cited, the only difference,
so far as concerns the right of dissolution by one partner, between
a partnership for an indefinite period and one for a specified term, is
this: In the former case, the dissolution is no breach of the partner-
ship agreement, and affords the other partner no ground of com-
plaint. In the latter case, such a dissolution before the expiration
cf the time stipulated is a breach of the agreement, and, as such,
to be compensated in damages. But in either case the action of one
partner does actually dissolve the partnership."

-'" Bates, Partn. § 570. And see Morss v. Gleason, 64 N. Y. 204;
Peters v. McWilliams, 78 Va. 567; Ross v. Cornell, 45 Cal. 133; Mc-

HOW EFFECTED. 269

without any change in membership does not operate as a dis-
solution.28

Transfer of Partner s Interest.

The transfer of one partners interest^ either by ^voluntary ^
acfor"T^~saTe under legal process, operates as a dissolution.29
Tins rule is, of course, subject to the difference of opinion as
to whether a partner can dissolve a partnership for a definite
term by any voluntary act of himself alone.30 A sale by one
partner to his copartner is clearly a dissolution by mutual
consent.31

Same — By Decree of Court.

145. A courtofeguity has iurisdiction to decree the disso-
lution of a partnership, and_will^do so where sufficient,
cause^ejxists^

Where a partnership is one at will, it is not necessary to
resort to equity to obtain a dissolution, because, as has been

Call v. Moss, 112 111. 493; Blake v. Sweeting, 121 111. 67, 12 N. E. 67;
Givins v. Berry, 21 Ky. L. R. 680, 52 S. W. 942.

28 Billingsley v. Dawson, 27 Iowa, 210; Gill v. Ferris, 82 Mo. 156.

29Blaker v. Sands, 29 Kan. 587; Clark v. Carr, 45 111. App. 469;
Freeman v. Hemenway, 75 Mo. App. 611; Ren ton v. Chaplain, 9 N. J.
Eq. 62; Comstock v. Buchanan, 57 Barb. (N. Y.) 127; Mumford v.
McKay, 8 Wend. (N. Y.) 442; Marquand v. New York Mfg. Co., 17
Johns. (N. Y.) 525; Wilson v. Waugh, 101 Pa. 233; Horton's Appeal,
13 Pa. 67; Power v. Kirk, 1 Pittsb. (Pa.) 510; Carter v. Rowland, 53
Tex. 540; Sanchez v. Goldfrank (Tex. Civ. App.), 27 S. W. 204; Bank
v. Carrollton Railroad, 11 Wall. (U. S.) 624, Mechem's Cases, 147;
Heath v. Sansom, 4 Barn. & Adol. 172; Carroll v. Evans, 27 Tex.
262. A sale and transfer of the interest which one partner has in a
particular stock held by the firm does not operate as a dissolution.
Comstock v. Buchanan, 57 Barb. (N. Y.) 127.

so See Ferrero v. Buhlmeyer, 34 How. Prac. (N. Y.) 33.

si Walker v. Davis, 59 Iowa, 103, 12 N. W. 798; Wiggin v. Good-
win, 63 Me. 389; Heath v. Sansom, 4 Barn. & Adol. 172. Compare
Taft v. Buffum, 14 Pick. (Mass.) 322.

270 DISSOLUTION.

seen, such a partnership may be dissolved al any time by any
partner by simply giving notice to that effect; bu1 where the
partnership is for a stipulated term, and a partner desires
to dissolve it before the expiration of. such term, it is (lie usual
practice to resort to a court of equity for a decree of dissolu-
tion. This is because, conceding (lie power of one partner to
dissolve such a partnership by his own act, he dissolves it at
his peril, and must respond to his copartners in damages if
he 'lot's so without just and legal cause. By resort to a court
of equity, he avoids this risk, and the existence of cause for
dissolution is determined in advance of actual dissolution.
Of course such relief can be had only in equity, as a court of
law has no jurisdiction of such matters. The mere fact that
a partner may dissolve by giving notice to his copartner does
not preclude a resort to a court of equity as a dissolution in-
volves a settlement and accounting over which equity has
plenary jurisdiction.32 The mere filing of a suit seeking dis-
solution and settlement of a partnership does not, ipso facto,
operate as a dissolution.33

Grounds for Dissolution.

146. A court of equity may dissolve a partnership for any
of the following causes, viz. :

(a) Fraud-in formation of partnership.

(b) Insanity of partner.

(c) Hopelessness-of success.

(d) Misconduct of parJjier.L ; "' :f^^a -

Fraud.

i u,-v h;!- 1 k ■en led into a partnership by moans
of fraud and deceit, he may maintain a suit in equity for a

32 Adams v. Shewalter, 139 Ind. 178, 38 N. W. 607; Babcock v.
llermance, 48 N. Y. 683.

33 Bagnetto v. Bagnetto, 51 La. Ann. 1200, 25 So. 987.

GROUNDS FOR. 271

dissolution/34 or he may maintain a suit to rescind the con-
tract, and require his partner to place him in statu quo,35
provided, of course, he has not ratified the contract after
knowledge of the fraud.36

Insanity.

Insanity of a partner does not, ipso facto, and byoperatmn
of law, work a dissolution of the partnership,37 Imt it constj-

tutos n sufficient ground to justify a court of equitv in decree-
nig a dissolution/5* though, where it is only temporary, a dis-
solution will be denied.30

Hopelessness of Success.

Any circumstance which renders the continuance of the
partnership. £>r the attainment of the common end with a
view to which it was entered into, practically impossible, is

.Mn r..m.m r r ., ■ ■ '»'«■ I llll f I, .. _ ■

sufficient to warrant a dissolution.40 Where certain loss j*

■^ Oteri v. Scalzo, 145 U. S. 578.

ssLindl. Partn. pp. 480, 482; Richards v. Todd, 127 Mass. 167;
Howell v. Harvey, 5 Ark. 270, Mechem's Cases, 354; Newbigging v.
Adam, 34 Ch. Div. 582; Mycock v. Beatson, 13 Ch. Div. 384; Pillans
v. Harkness, Colles, 442; Rawlins v. Wickham, 1 Giff. 355, 3 DeGex
& J. 304. Misconduct and mismanagement by a partner is not ground
for a rescission where the partner was guilty of no fraud when the
partnership agreement was made. Hollister v. Simonson, 36 App.
Div. 63, 55 N. Y. Supp. 372.

30 St. John v. Hendrickson, 81 Ind. 350.

3? Raymond v. Vaughn, 128 111. 256, 21 N. E. 566, holding that
even an adjudication of insanity, the appointment of a conservator,
and commitment to an asylum does not operate as a dissolution.
But see Isler v. Baker, 6 Humph. (Tenn.) 85.

38 Raymond v. Vaughn, 128 111. 256, 21 N. E. 566; Jurgens v. Itt-
man, 47 La. Ann. 367, 16 So. 952, Burdick's Cases, 558; Griswold v.
Waddington, 15 Johns. (N. Y. ), 57, Burdick's Cases, 544; Jones. v.
Noy, 2 Mylne & K. 125; Jones v. Lloyd, L. R. 18 Eq. 265.

39 Raymond v. Vaughn, 128 111. 256, 21 N. E. 566; Kirby v. Carr,
3 Younge & C. 185; Whitwell v. Arthur, 35 Beav. 140.

40Lindl. Partn. p. 575; Jackson v. Deese, 35 Ga. 84; Moies v.
O'Neill, 23 N. J. Eq. 207; Brown v. Hicks, 8 Fed. 155; Rosenstein v.

272 DISSOLUTION.

the only resull of going on, any partner La entitled to have the
firm dissolved, even though the agreed term of its existence
lias aol yet expired.41

Misconduct of Partner.

A court of equity will dissolve a partnership at the_in-
stance of a partner where a copartner so seriously miscon-

. , ■■"■II ■ A>jiiiim— ay mimi m

ducts himself as to render it practically impossihle tor his ,-,,-
partners t<> continue to act with him!42 "But it is not con-
sidered to be the duty of the court to enter into partnership
squabbles, and it will not dissolve a partnership on the ground
of the ill temper or misconduct of one or more of the partners,
unless the others are in effect excluded from the concern, or
unless the misconduct is of such a nature as to utterly destroy
the mutual confidence which must subsist between partners if
they are to continue to carry out their business together." 43
Excluding a partner from any voice in the management of
the business, and disregard of his advice and wishes,44 irre-
concilable differences and personal ill-will between the part-
ners rendering co-operation in the business impossible,45 keep-
Burns, 41 Fed. 841, Burdick's Cases, 557; Sebastian v. Booneville
Academy Co., 22 Ky. L. R. 186, 56 S. W. 810.

4i Jennings v. Baddeley, 3 Kay & J. 78; Wilson v. Church, 13 Ch.
Div. 1; Rosenstein v. Burns, 41 Fed. 841; Holladay v. Elliott, 8 Or.
84.

42 Moore v. Price, 116 Ala. 247, 22 So. 531; Cash v. Earnshaw, 66
111. 402; Gerard v. Gateau, 84 111. 121; Bishop v. Breckles, Hoff. Ch.
(N. Y.) 534; Henn v. Walsh, 2 Edw. Ch. (N. Y.) 129; Berry v. Cross,
3 Sandf. Ch. (N. Y.) 1; Reiter v. Morton, 96 Pa. 229; Warner v.
Leisen, 31 Wis. 169; Rosenstein v. Burns, 41 Fed. 841.

43Lindl. Partn. p. 580. See, also, Anon., 2 Kay & J. 441; Smith v.
Jeyes, 4 Beav. 503; Goodman v. Whitcomb, 1 Jac. & W. 589; Harrison
v. Tennant, 21 Beav. 482. An see cases cited in preceding note.

44 Einstein v. Schnebly, 89 Fed. 540.

45Philipp v. Von Raven, 26 Misc. 552, 57 N. Y. Supp. 701; Sutro
v. Wagner, 23 N. J. Eq. 388; Baxter v. West, 1 Drewry & S. 173;
Pease v. Hewitt, 31 Beav. 22.

RIGHTS, POWERS, ETC., AFTER. 273

ing erroneous accounts, and not entering receipts,46 refusal
to meet on matters of business,47 conveyance of partnership
realty in payment of individual debts,4S or breach of the part-
nership articles,49 have been held sufficient to justify a disso-
lution, and where the misconduct of a partner is such as to
disable him from carrying on the business for which the part-
nership was formed, it is of course sufficient ground for dis-
solution.49a

A mere error in judgment, upon the part of a partner, caus-
ing loss to the firm,50 or a want of courtesy on the part of a
partner to customers of the firm,51 is not sufficient cause for
a decress of dissolution.

A dissolution will not be granted upon the ground of mis-
conduct at the instance of the partner guilty of the miscon-
duct in question.52

Rights, Powees, and Liabilities After Dissolution.

147. The rights, powers, and liabilities of partners and cred-
itors after dissolution will be considered, in the order

named, with respect to thosg^

(a) Of partners generally. _

(b) Of liquidating partners.

(c) Of surviving partners.

(d) Of estate of deceased partner.

(e) Of creditors^^

46 Cottle v. Leitch, 35 Cal. 434; Cheesman v. Price, 35 Beav. 141.

47 De Berenger v. Hamel, 7 Jar. & B. 25.

« Hubbard v. Moore, 67 Vt. 532, 32 Atl. 465.

49 Abbot v. Johnson, 32 N. H. 9.

49a Partnership was formed to do certain work for a third party,
and one partner was guilty of misconduct for which he was dis-
charged. Lapenta v. Lettieri, 72 Conn. 377, 44 Atl. 730.

50 Cash v. Earnshaw, 66 111. 402.

si Gerard v. Gateau, 84 111. 121, Mechem's Cases, 366.
52 Gerard v. Gateau, 84 111. 121, Mechem's Cases, 366; Harrison v.
Tennant, 21 Beav. 493.

18

L>74 DISSOLUTION.

Same — Of Partners Gkxkkaij.y.

148. After dissolution, a partner^sjyrtliority to bind his co-
partner is limited to acts necessary or_proper for the
winding up of the partnership affairs.

After a dissolution, the authority of each partner to bind
the firm, and the other rights and obligations of the partners,
continue, notwithstanding the dissolution, so far as may be
necessary to wind up the affairs of the partnership, and to
complete transactions begun but not finished at the time of
the dissolution, but not otherwise.53 In the absence of a dif-
ferent agreement between them, each partner has an equal'
right to th possession of firm assets, and is under an equal
dutv to apply them to the payment of firm debts.64 Thus,
after a dissolution, a partner can sell the partnership assets,55"

esHeartt v. Walsh, 75 111. 200; Major v. Hawkes, 12 111. 298; West-
ern Stage Co. v. Walker, 2 Iowa, 504; Seldner v. Mt. Jackson Nat.
Bank, 66 Md. 488, 8 Atl. 262; Gray v. Green, 142 N. Y. 316, 37 N. E.
124; Robbins v. Fuller, 24 N. Y. 570; Hilton v. Vanderbilt, 82 N. Y.
591; Thursby v. Lldgerwood, 69 N. Y. 198; Lange v. Kennedy, 20
Wis. 279; Huntington v. Potter, 32 Barb. (N. Y.) 300; Gates v.
Beecher, 60 N. Y. 518, Burdick's Cases, 372; Sutton v. Dillaye, 3 Barb.
(N. Y.) 529; Hubbard v. Matthews, 54 N. Y. 43; Briggs v. Briggs,
15 N. Y. 471; Whiting v. Farrand, 1 Conn. 60; Palmer v. Sawyer,
114 Mass. 1; Smythe v. Harvie, 31 111. 62; Butchart v. Dresser, 10
Hare, 453, 4 De Gex, M. & G. 542; Peacock v. Peacock, 16 Ves. 57, 19
Eng. Rul. Cas. 552. The partnership, with all its incidents, contin-
ues for the purpose of settling the partnership affairs, and until that
is effected. Murray v. Mumford, 6 Cow. (N. Y.) 441. Payment of
rent due under a pre-existing partnership lease is not the creation of
a new obligation, but the payment of debt due from the firm, which
the partner had the right to make. Barnes v. Northern Trust Co.,
169 111. 112, 48 N. E. 31.

s* Gray v. Green, 142 N. Y. 316, 37 N. E. 124; Goertner v. Trustees
of Canajoharie, 2 Barb. (N. Y.) 625; Lapenta v. Lettieri, 72 Conn.
377, 44 Atl. 730.

55 Hogendobler v. Lyon, 12 Kan. 276; Needham v. Wright, 140 Ind.

RIGHTS, POWERS, ETC., AFTER. 275

or pledge or mortgage them for the purpose of completing a
transaction already commenced,56 or of securing a debt al-
ready incurred.57 Each partner has authority to collect
debts due the firm, receive payment, and grant discharges.58
He also has power to pay and settle firm liabilities.59 ■ Xew
obligations which are necessary and merely incidental to the
performance of existing obligations of the firm may be in-
curred,00 but where their advisability is doubtful one party
cannot proceed against the dissent of his copartner.603. This
authority does not extend to a bankrupt partner, for a firm
is in no case bound by the acts of a bankrupt partner,61

190, 39 N. E. 510, Burdick's Cases, 260; Robbins v. Fuller, 24 N. Y.
570; Fox v. Hanbury, Cowp. 445.

56 Butchart v. Dresser, 4 De Gex, M. & G. 542; Miller v. Florer, 15
Ohio St. 148. But compare Roots v. Mason City S. & M. Co., 27 W.
Va. 483.

5T Thompson v. Noble, 108 Mich. 19, 65 N. W. 563; In re Clough, 31
Ch. Div. 325.

ss Gordon v. Albert, 168 Mass. 150, 46 N. E. 423; Van Keuren v.
Parmelee, 2 N. Y. 523, Mechem's Cases, 411; Robbins v. Fuller, 24
N. Y. 570; Huntington v. Potter, 32 Barb. (N. Y.) 300; Ward v. Bar-
ber, 1 E. D. Smith (N. Y.) 423; Goertner v. Trustees of Canajoharie,
2 Barb. (N. Y.) 625; Fettretch v. Armstrong, 5 Rob. (N. Y.) 339;
Sanford v. Mickles, 4 Johns. (N. Y.) 224; Riddle v. Etting, 32 Pa.
412. Payment to a retiring partner, with notice that he has retired,
is good. Fettretch v. Armstrong, 5 Rob. (N. Y.) 339. See, also, to
same effect, Gillilan v. Sun Mut. Ins. Co., 41 N. Y. 376. A partner
has no power to accept anything but money in payment of a firm
debt. Kutz v. Naugle, 7 Pa. Super. Ct. 179.

eoMilliken v. Loring, 37 Me. 408; Bass v. Taylor, 34 Miss. 342.

soButchart v. Dresser, 10 Hare, 453, 4 De Gex, M. & G. 542, Bur-
click's Cases, 363. Although, ordinarily, a partner has no authority
after dissolution to make or renew negotiable paper, where the firm
had agreed to renew certain notes, and subsequently dissolved, any
partner has authority to renew the notes, in pursuance of the firm
agreement. Richardson v. Moies, 31 Mo. 430, Burdick's Cases, 366.

soa Extensive and doubtful litigation. Richard v. Mouton, 109
La. 465, 33 So. 563.

« Craven v. Edmondson, 6 Bing. 734, 31 Rev. R. 529; and Dick-
son v. Cass, 1 Barn. & Adol. 343.

276 DISSOLUTION.

though any person who lnss, after the bankruptcy, repre-*
eented himself, or suffered himself to be represented, as a part-
ner of the bankrupt, may be liable for his acts.63

A partner has no authority, after dissolution, to make or
indorse negotiable paper on behalf of the firm,63 unless he
has been specially authorized t<» do so by his copartners. But
where negotiable paper forms pari of the firm assets, it seems
that a partner^ in the course of winding up the partnershii
affairs, may transfer such paper by an indorsement, "With-
oui recourse." 04 After dissolution, a partner cannot bind his
copartners by an admission of liability.05 So it is generally
held that one partner cannot take a case out of the statute of
limitations by an admission of liability, new promise, or par-

es Lacy v. Woolcott, 2 Dowl. & R. 458.

C3 Huntington-White Lime Co. v. Mock, 14 Ind. App. 221; Smith
v. Sheldon, 35 Mich. 42, Mechem's Cases, 431; Goodspeed v. South
Bend Chilled Plow Co., 45 Mich. 237, 7 N. W. 810; Potter v. Tolbert,
113 .Mich. 486, 71 N. W. 849, Burdick's Cases, 367; Sanford v. Mickles,
4 Johns. (N. Y.) 224; Lansing v. Gaine, 2 Johns. (N. Y.) 300; Na-
tional Bank v. Norton, 1 Hill (N. Y.) 572; Mitchell v. Ostrom, 2
Hill (N. Y.) 520; Lusk v. Smith, 8 Barb, (N. Y.) 570; McCowin v.
Cubbison, 72 Pa. 358; Tarver v. Evansville Furniture Co., 20 Tex.
Civ. App. 66, 48 S. W. 199; Commercial Bank v. Miller, 96 Va. 357,
31 S. E. 812. To the effect that a partner, after dissolution, can give
notes in liquidation of a partnership liability, as, by so doing he does
not create a new debt or obligation, see McPherson v. Rathbone, 11
Wend. (N. Y.) 96, and Ward v. Tyler, 52 Pa. 393.

04 Yale v. Eames, 1 Mete. (Mass.) 486. Contra, Fellows v. Wyman,
33 N. H. 351; Sanford v. Mickles, 4 Johns. (N. Y.) 224.

bis Ilackley v. Patrick, 3 Johns. (N. Y.) 356; Smith v. Ludlow, 6
Johns. (N. Y.) 267; Hopkins v. Banks, 7 Cow. (N. Y.) 650; Walden
v. Sherburne, 15 Johns. (N. Y.) 409; Brisban v. Boyd, 4 Paige, Ch.
(N. Y.) 17; Hart v. Woodruff, 24 Hun (N. Y.) 510, Burdick's Cases,
370; Barnes v. Northern Trust Co., 169 111. 112, 48 N. E. 31. Contra,
Wood v. Braddick, 1 Taunt. 104. After dissolution, one partner has
no power to bind his copartners by a promise to pay a firm indorse-
ment from which they have been discharged by want of notice of
dishonor. Schoneman v. Fegley, 7 Pa. 433.

RIGHTS, POWERS, ETC., AFTER. 977

tial payment.66 but upon this point there is a difference of
opinion, and some courts have taken a contrary view.67

Of course, if there has been no notice of dissolution, the
implied powers of a partner remain the same after as before
dissolution.68

Same — Of Liquidating Paktneks.

149. By mutual agreement, the partners may delegate ex-
clusive authority to one or more of their number to
*\L. windjip_and settle the~partnership affairs.

A liquidating partner is one of a dissolved firm who re-
ceives and disburses the assets, to the exclusion of the others,
with their consent, and by his own apparent voluntary action.
Formal appointment is not necessary, nor must every act of
his be without consultation with the others.69 The duty of
a liquidating partner is to collect and adjust debts due to the
firm, to turn the assets into money, to pay and discharge the
outstanding liabilities, and then to pay over to the other part-
ners their just share of the remaining surplus.70 He has the
same powers and authority that any other partner has after

<«Tate v. Clements, 16 Fla. 339; Van Keuren v. Parmelee, 2 N. Y.
523, Mechem's Cases, 411; Bush v. Stowell, 71 Pa. 208; Reppert v.
Colvin, 48 Pa. 248; Levy v. Cadet, 17 Serg. & R. (Pa.) 126; Jack v.
McLanahan, 191 Pa. 631, 43 Atl. 356; Davis v. Poland, 92 Va. 225, 23
S. E. 292; Bell v. Morrison, 1 Pet. (U. S.) 351. Compare Forbes v.
Garfield, 32 Hun (N. Y.) 389; Clement v. Clement, 69 Wis. 599, 35
N. W. 17.

6T Beardsley v. Hall, 36 Conn. 270; Merritt v. Day, 38 N. J. Law,
32; Whiteomb v. Whiting, 2 Doug. 652.

cs See Bristol v. Sprague, 8 Wend. (N. Y.) 423. And see, generally,
ante, § 107.

coGarretson v. Brown, 185 Pa. 447, 40 Atl. 293; Fulton v. Central
Bank of Pittsburgh, 92 Pa. 112.

to Gilmore v. Ham, 142 N. Y. 1, 36 N. E. 826; Woodson v. Wood, 84
Va. 478, 5 S. E. 277.

0 7^ DISSOLUTION.

dissolution, and no greater, unless they are expressly con-
ferred. His authority is Limited to the performance of acta
necessary or proper to the grinding up of the partnership busi-
ness,73 and cannot, except as to persons having no notice of
the dissolution, Kind the firm by new obligations.71* The
appointmenl merely takes away the authority <>f the other
partners to act, and confers it exclusively upon the liquidat-
ing partner.72 Thus, a liquidating partner has no implied
authority, to, make, indorse, or renew negotiable paper on be-
half of the linn.7:! So, he has no authority to hind his Late
copartners by an acknowledgmenl or admission of Liability.74
In Pennsylvania, the powers of a liquidating partner are
somewhat more extensive than those of partners generally
after dissolution.75

-i Hilton v. Yanderbilt, 82 N. Y. 591; Gilmore v. Ham, 142 N. Y. 1;
Palmer v. Dodge, 4 Ohio St. 21.

TiaBass Dry Goods Co. v. Granite City Mfg. Co., 116 Ga. 176, 42
S. E. 415.

"2 Hayes v. Heyer, 4 Sandf. Ch. (N. Y.) 485. In Napier v. McLeod,
9 Wend. (N. Y.) 120, two partners, on the dissolution, constituted
the third their attorney to collect, etc., all debts due to the firm. It
was held that the power, although in terms irrevocable, did not op-
erate as a transfer, and that a release of a debt, subsequently exe-
cuted by one of the other partners, was good.

73 Bank of Montreal v. Paige, 98 111. 109; Van Valkenburg v. Brad-
ley, 14 Iowa, 108; Perrin v. Keene, 19 Me. 355; Potter v. Tolbert, 113
Mich. 486, 71 N. W. 849, Burdick's Cases, 367; Smith v. Sheldon, 35
Mich. 42, Mechem's Cases, 431; Mauney v. Coit, 80 N. C. 300; Pal-
mer v. Dodge, 4 Ohio St. 21; Haddock v. Crocheron, 32 Tex. 276;
Parker v. Cousins, 2 Grat. (Va.) 372. See, also, Brown v. Bamber-
ger, 110 Ala. 342, 20 So. 114. As to the right to give a mere acknowl-
edgment of the amount due in the form of a due-bill or 'I. O. U.,' see
Smith v. Sheldon, 35 Mich. 42, Mechem's Cases, 431.

'* Hackley v. Patrick, 3 Johns. (N. Y.) 536. This rule is, of course,
subject to the difference of opinion prevailing upon the general ques-
tion whether any partner has such authority after dissolution. See
preceding section.

"•r> In Pennsylvania, a liquidating partner has power to borrow
money, on the credit of the late firm, for the purpose of paying its

RIGHTS, POWERS, ETC., AFTER 279

As to persons having notice of the appointment of a liquid-
ating partner, the other partners have no power to bind the
firm, but as to the persons without notice, any partner has
power to bind the firm by any act within the apparent scope
of his authority, notwithstanding the appointment of a liquid-
ating partner.76 The extent of the apparent or implied au-
thority of a partner, both before and after dissolution, has
already been considered.

A liquidating partner is a ytia.si truster, and must act with
perfect good faith in all things, and is liable for anv negli-
'■ fraud, ! hi t imt for mere errors of judgment.77 lie
is bound to account, and. acts i of irauo!. Ty his copartners do not
relieve him of such duty though they may entitle him to al-
lowances in his account.773.

In the absence of special agreement, a liquidating partner
is not entitled to compensation for winding up the business,
by way of commission or otherwise.78

debts. Davis' Estate, 5 Whart. (Pa.) 530; Whitehead v. Bank of
Pittsburgh, 2 Watts & S. (Pa.) 172; Robinson v. Taylor, 4 Pa. 242;
Brown v. Clark, 14 Pa. 469; McCowin v. Cubbison, 72 Pa. 358. He
may bind his late copartners by an indorsement made for the pur-
pose of raising money to pay partnership debts. Lloyd v. Thomas,
79 Pa. 68. He may make or renew partnership notes. Meyran v.
Abel, 189 Pa. 215, 42 Atl. 122. He may renew an accommodation in-
dorsement. Dundas v. Gallagher, 4 Pa. 205. The acknowledgment
of a liquidating partner stops the running of the statute of limita-
tions which has not already closed on the claim. McCoon v. Gal-
braith, 29 Pa. 293. See, also, Jack v. McLanahan, 191 Pa. 631, 43
Atl. 356.

-nGillilan v. Sun Mut. Ins. Co., 41 N. Y. 376; Clark v. Reed, 31
Leg. Int. (Pa.) 413.

77 See Garretson v. Brown, 185 Pa. 447, 40 Atl. 293; Renfrow v.
Pearce, 68 111. 125; Gunn v. Black, 60 Fed. 151, 8 C. C. A. 534.

77a Wilson v. Keller, 195 Pa. 98, 45 Atl. 682.

78 Dougherty v. Van Nostrand. Hoff. Ch. (N. Y.) 68; Stockdale v.
Maginn, 207 Pa. 227, 56 Atl. 439; Lamb v. Wilson, 3 Neb. (Unoff.)
496, 92 N. W. 167.

0

L'v,) DISSOLUTION.

Same — Of Surviving Partners.

150. Upon the death of a partner, the surviving partner or
partners have the exclusive right_oLj>pssession and
control of the joint property for the purpose of wind-

ing up the partnership business, and _may do any act_
necessary nr p™per for that purpose.

In General.

It has already been seen that the legal title to firm person-
alty, and the equitable title to firm realty, pass upon the death
of a partner to the survivors, but in trust for the purpose of
winding up the partnership affairs.79 The survivors have
the exclusive right and duty to act in the settlement of the
partnership, and the personal representatives of the deceased
partner cannot interfere.80 And upon the death of the last

~Mlll X I I I 11.11 III! I -

to See ante, c. 7, "Partnership Property." See, also, Miller v.
Jones, 39 111. 54; Merritt v. Dickey, 38 Mich. 41; Way v. Stebbins,
47 Mich. 296, 11 N. W. 166; Barry v. Briggs, 22 Mich. 201; Bassett v.
Miller, 39 Mich. 133; Blodgett v. City of Muskegon, 60 Mich. 580, 27
N. TV. 686; Pfeffer v. Steiner, 27 Mich. 537. A surviving partner,
being entitled to the possession and control of the partnership effects,
can proceed directly in the district court to obtain control and to
have a partition of the real estate belonging to the partnership, but
standing in the name of his deceased partner. Gray v. Palmer, 9
Cal. 616.
so Rice v. Merchants' & Planters' Nat. Bank, 100 Ala. 617, 13 So.
659; Merritt v. Dickey, 38 Mich. 41; Loomis v. Armstrong, 49 Mich.
521; Roberts v. Kelsey, 38 Mich. 602; Evans v. Evans, 9 Paige (N.
Y.) 178; Jacquin v. Buisson, 11 How. Prac. (N. Y.) 385; Clay v.
Field, 34 Fed. 375; McGorray v. O'Connor, 87 Fed. 586. Chancery
will not appoint a receiver, and thus deprive the survivor of the
right to close up the affairs of the firm, if he is responsible, and acts
in good faith. Evans v. Evans, 9 Paige, Ch. (N. Y.) 178; Connor v.
Alton. Har. (Mich.) 371. Payment of one-half of a debt due the firm
to the executor of a deceased partner will not discharge the debtor

POWERS, RIGHTS, ETC., AFTER 094

■survivor, the right passes to his personal representative. It
is immaterial whether the partnership was dissolved by death,
or whether the death took place after a previous voluntary
dissolution. The rights of the survivor are the same in
either case.81 In a few states, provision is made by statute
for the administration of the partnership estate. The sur-
viving partner is given the prior right to take out letters of
administration, but if he fails to do so, the administration de-
volves upon the personal representative of the deceased part-
ner.82

The powers and authority of surviving partners, as in the
case of liquidating partners, or partners generally after dis-
solution, extend to, and are limited by, such acts as are nec-
essary or proper to wind up the affairs of the late firm.83
They may do whatever is needful to that end* even to the bor-
rowing of money.S3a They may and must carry out existing
obligations, and have power to do anything incidental there-
to,84 but they have no implied power to enter into new con-

from liability to the survivor. Wallace v. Fitzsimmons, 1 Dall.
(Pa.) 248.

si Murray v. Mumford, 6 Cow. (N. Y.) 441, in which case the
liquidating partner died, and it was held that the other partner was
entitled to the possession of firm assets, as against the personal rep-
resentatives of the deceased.

82 See, generally, Mcintosh v. Zaring, 150 Ind. 301, 49 N. E. 164;
Carr v. Catlin, 13 Kan. 393; Matherson v. Wilkinson, 79 Me. 159, 8
Atl. 684; McCaughan v. Brown, 76 Miss. 496, 25 So. 155; Hargardine
v. Gibbons, 114 Mo. 561, 21 S. W. 726, affirming 45 Mo. App. 460; State
v. Withrow, 141 Mo. 69, 41 S. W. 980; Goodson v. Goodson, 140 Mo.
206, 41 S. W. 737.

88 Powers of surviving partners, see, generally, Barton v. Lovejoy,
66 Minn. 380, 57 N. W. 935; Bloodgood v. Bruen, 8 N. Y. 362; Corder
v. Steiner (Tex. Civ. App.), 54 S. W. 277.

83a Rosenthal v. Hasberg, 84 N. Y. Supp. 290.

si Little v. Caldwell, 101 Cal. 553, 36 Pac. 107; Oliver v. Forrester,
96 111. 315; Mason v. Tiffany, 45 111. 392; Miller v. Hoffman, 26 Mo.
App. 199; Denver v. Roane, 99 U. S. 355.

•_>sL' DISSOLUTION.

tracts, or to continue the partnership business.86 By express
agreement, or by provision in the will of the deceased partner,
the Burvivors may be authorized to carry on the business and
incur new obligations, Dotwithstanding the death of a part-
ner.86 In such case, the surviving partners cannol bind the
general assets of the estate of the deceased partner, but only
those already invested in the business.87

Particular /'overs.

The surviving partner may apply partnership funds to the
liquidation of any obligation of the firm, and to the discharge
of all liens upon the joint property.88 He may sell partner-

85Remick v. Emig, 42 111. 342; Forrester v. Oliver, 1 111. App. 259;
Young v. Scoville, 99 Iowa, 177, 68 N. W. 670; Robinson v. Simmons,
146 Mass. 167, 15 N. E. 558; Oliver v. Olmstead, 112 Mich. 483, 70 N.
W. 1036; Dexter v. Dexter, 43 App. Div. 268, 60 N. Y. Supp. 371; Bass
Dry Goods Co. v. Granite City Mfg. Co., 116 Ga. 176, 42 S. E. 415.
The surviving partner may continue the business long enough to
close it out without sacrificing it, but no longer. Frey v. Eisen-
hardt, 116 Mich. 160, 74 N. W. 501. Since death of a member dis-
solves a partnership, a continuation of the business thereafter by the
surviving partner and the executor of the deceased member, in pur-
suance of an agreement between them, is the formation of a new
partnership. McGrath v. Cowen, 57 Ohio St. 385, 49 N. E. 338

"Where the assets of a partnership, dissolved by the death of one
of its members, were used by a new firm formed by the surviving
partner, the old partnership was entitled to a share in the profits of
the new firm proportionate to the value of the property or services
contributed by the new firm, but all the property of the new firm
should not be regarded as assets of the old." Painter's Ex'rs v.
Painter, 133 Cal. XIX, 65 Pac. 135.

B6 Evans v. Watts, 44 W. N. C. (Pa.) 185; Stewart v. Robinson, 115
N. Y. 328, 22 N. E. 160, 163.

si Steiner v. Steiner Land & Lumber Co., 120 Ala. 128, 26 So. 494;
In re Roessler's Estate, 19 Pa. Co. Ct. Rep. 161, 5 Pa. Dist. Rep. 776;
Jones v. Walker, 103 U. S. 444, Mechem's Cases, 391.

8s Shearer v. Shearer, 98 Mass. 107, Ames' Cas. 185; Lindner v.
Adams County Bank, 49 Neb. 735, 68 N. W. 1028, Burdick's Cases,
262, Mechem's Cases, 401; Moist's Adm'rs' Appeal, 74 Pa. 166.

POWERS, RIGHTS, ETC., AFTER. 283

ship assets,80 or pledge or mortgage them,90 for purposes con-
nected with the settlement of the estate,''1 or may make an as-
signment for the benefit of creditors.02 He has the sole right
to collect and settle claims, receive payment, and grant dis-
charges.93 A surviving partner cannot make or indorse no
gotiable paper, so as to bind other cosurvivors or the estate of

soMilner v. Cooper, 65 Iowa, 190, 21 N. W. 558; Cockerham v. Bos-
ley, 52 La. Ann. 65, 26 So. 814; Durant v. Pierson, 124 N. Y. 444, 26
N. E. 1095, Mechem's Cases, 403. A sole surviving partner has a
right, acting honestly and with reasonable discretion and diligence,
to dispose of the partnership assets as he pleases, to settle all debts
against the firm, to make any compromise he may deem necessary,
and to turn the assets into an available and distributable form.
Barry v. Briggs, 22 Mich. 201. See, also, to same effect, Wilson v.
Soper, 13 B. Mon. (Ky.) 411; Loeschigk v. Hatfield, 51 N. Y. 660;
Milner v. Cooper, 65 Iowa, 190, 21 N. W. 558. A surviving partner
has power to assign a chose in action, e. g., a bond and mortgage, be-
longing to the late firm, and payable to them. Pinckney v. Wallace,
1 Abb. Prac. (N. Y.) 82.

90 Breen v. Richardson, 6 Colo. 605; Burchinell v. Koon, 25 Colo.
59, affirming 8 Colo. App. 463; In re Crane's Estate, 4 Ohio Dec. 398;
Durant v. Pierson, 124 N. Y. 444, 26 N. E. 1095, Mechem's Cases, 403;
Williams v. Whedon, 109 N. Y. 333, 16 N. E. 365; Bohler v. Tappan,
] Fed. 469; Butchart v. Dresser, 4 De Gex, M. & G. 542.

9i As against the heirs of a deceased partner, a surviving partner
cannot mortgage the decedent's interest in partnership lands for his
own individual debts, or for any purpose except to close up the busi-
ness, and pay partnership debts. Brown v. Watson, 66 Mich. 223, 33
N. W. 493.

»2 Shattuck v. Chandler, 40 Kan. 516, 20 Pac. 225, Mechem's Cases,
296; Loeschigk v. Hatfield, 5 Rob. (N. Y.) 26, 4 Abb. Prac. (N. S.;
N. Y.) 210, affirmed 51 N. Y. 660; Egberts v. Wood, 3 Paige (N. Y.)
517; Hutchinson v. Smith, 7 Paige, Ch. (N. Y.) 26; Williams v.
Whedon, 109 N. Y. 333, 16 N. E. 365; Patton v. Leftwich, 86 Va. 421;
Emerson v. Senter, 118 U. S. 3, Burdick's Cases, 253. But see State
v. Withrow, 141 Mo. 69, 41 S. W. 980.

9- Cockerham v. Bosley, 52 La. Ann. 65, 26 So. 814; McCaiighan
v. Brew", 7$ ftliftg ^Qfi, 25 So. 155. A settlement between an employee
of a partnership and the surviving partner, fixing the past salary of
the employee, which had never before been agreed upon, is binding
upon the firm and the heirs or representatives of the deceased part-

L's-i DISSOLUTION.

the deceased partner, in the absence of express authority.94
A debl cannot be revived by the surviving partner, so as to
charge the estate or interest of the deceased partner, when
haired by statute, against the partnership.96

. I ctions.

At common law after the death of a partner, all actions
upon claims in favor of or against the firm must be brought
by or againsl the surviving partners alone. The personal
representative of the deceased partner cannot be joined either
as a plaintiff96 or as a defendant.97 Upon the denth_ojLtlio
last survivor, his persojiaXrepresentatives alone can su^ or hfl.
■sued."8 These rules resulted from the joint nature of part-
nership liabilities and demands. At common law, the death
of a partner or joint debtor absolutely discharged his liability,
and cast it upon the survivor. So, upon the death of a joint
obligee, the entire beneficial interest passed to the survivors.90
The rule was otherwise in equity, and has been very generally

ner, unless set aside in a direct proceeding, on the ground of error,
mistake, or fraud. Hart v. Bowen, 86 Fed. 877.

^Carleton v. Jenness, 42 Mich. 110, 3 N. W. 284; Matteson v. Nath-
anson, 38 Mich. 377. Compare Johnson v. Berlizheimer, 84 111. 54.

»5 Bloodgood v. Eruen, 8 N. Y. 362.

osBelton v. Fisher, 44 111. 32; Brown v. Allen, 35 Iowa, 306; Wil-
son v. Soper, 13 B. Mon. (Ky.) 411; Holbrook v. Lackey, 13 Mete.
(Mass.) 132; Bassett v. Miller, 39 Mich. 133; Holmes v. DeCamp, 1
Johns. (N. Y.) 34; Daby v. Ericsson, 45 N. Y. 786; Beach v. Hayward,
10 Ohio, 455; Davis v. Church, 1 Watts & S. (Pa.) 241; McCartney
v. Hubbell, 52 Wis. 360, 9 N. W. 61.

■<- Palmer v. Maxwell, 11 Neb. 598, 10 N. W. 524; Arthur v. Gris-
wold, 16 Abb. Prac. (N. S.; N. Y.) 238; Voorhis v. Baxter, 18 Barb.
(N. Y.) 592; Hoskinson v. Eliot, 62 Pa. 393; Rusling v. Brodhead,
55 N. J. Eq. 200, 35 Ala. 841, Burdick's Cases, 273. The contrary is
held under the code. See Ricart v. Townsend, 6 How. Prac. (N. Y.)
460; Henderson v. Kissam, 8 Tex. 46.

os Galbraith v. Tracy, 153 111. 54, 38 N. E. 937, Burdick's Cases,
257; Nehrboss v. Bliss, 88 N. Y. 600, Burdick's Cases, 246; Costley v.
Wilkerson's Adm'r, 49 Ala. 210; Richards v. Heather, 1 Barn. & Aid.
•29.

ooRoosvelt v. McDowell, 1 Ga. 489; Walker v. Doane, 131 111. 27,

POWERS, RIGHTS, ETC., AFTER. 285

changed by statute. Thus, in some states it is provided that
the personal representatives of a deceased partner may he
joined as defendants with the survivors.100 In other states,
partnership obligations have been made joint and several,
and aTlirni creditor may either sue the survivorgjilone, or pro-
ceed against the estate of the deceased partner separately.101

Bight to Compensation.

The law imposes upon the surviving partner, as an inci-
dent to the contract of partnership, the duty of collecting the
assets and winding up the business of the firm, and he_is-jiQ_L
entitled_to compensation thpyp-fn-^ in the absence of an ex-
press agreement to Jhpt pfFp.pt. 10 2

Liability to Estate of Decedent.

Whether or not a surviving partner is to be regarded as a
trustee may admit of some question,103 but, at all events, in

22 N. E. 1006; Eich v. Sievers, 73 111. 194; Wapello County v. Big-
ham, 10 Iowa, 39; Cochrane v. Cushing, 124 Mass. 219; Fisher v.
Allen, 36 N. J. Law, 203; Neal's Ex'rs v. Gilmore, 79 Pa. 421; Grant
v. Shurter, 1 Wend. (N. Y.) 148; Hargadine v. Gibbons, 45 Mo. App.
460; Pendleton v. Phelps, 4 Day (Conn.) 481; Trundle v. Edwards,
4 Sneed (Tenn.) 574. That there is no beneficial survivorship in
partnership property, see ante, c. 7, "Partnership Property."

ioo Anderson v. Pollard, 62 Ga. 46; Trundle v. Edwards, 4 Sneed
(Tenn.) 573; Wiesenfeld v. Byrd, 17 S. C. 113.

ioi Ralston v. Moore, 105 Ind. 246, 4 N. E. 673; Shackleford's
Adm'r v. Clark, 78 Mo. 491; Weil v. Guerin, 42 Ohio St. 302.

102 Young v. Scoville, 99 Iowa, 177, 68 N. W. 670; Com. v. Bracken's
Heirs, 17 Ky. L. R. 785, 32 S. W. 609; Coakley's Adm'r v. Hazelwood's-
Ex'r, 21 Ky. L. R. 40, 49 S. W. 1067; Smith v. Smith, 51 La. Ann. 72,
24 So. 618; Loomis v. Armstrong, 49 Mich. 521, 14 N. W. 505, 63 Mich.
355, 29 N. W. 867; Ames v. Downing, 1 Bradf. (N. Y.) 321, Burdick's
Cases, 606. Compare Romnson v. Simmons, 146 Mass. 167, 15 N. E.
558; Zell's Appeal, 126 Pa. 329, 17 Atl. 647; Painter v. Painter (Cal.),
36 Pac. 865. In the absence of an express provision to the contrary,
salary provided for by the partnership articles does not continue
after dissolution of partnership by death of a partner. Rights of
surviving partners were being considered. Comstock v. McDonald,
126 Mich. 142, 85 N. W. 579.

103 See ante, §§ 67-71.

286 DISSOLUTION.

all his transact inns he is liable for the most perfect good faith,
and niiisi afford the representatives of the deceased full in-
formation as to the affairs of the firm, and must account to
them for his administration of the estate.104 lie cannot
make any profil by use of the partnership effects for his own
benefit.106 A surviving partner is liable to the estate of the
deceased partner for any Losses caused by his negligence or
want of good faith, hut net otherwise.100

Same — Of Estate of Deceased Partner.

151. The estateof_a_deceased_partner is entitled toreceij

from the survivors such partner's share of the hi
assets after all its affairs have been settled.

152. The estate of a deceased partner is liable in equity^anjj--

under modern statutes, to firm creditors.

It has been seen in a previous chapter that, upon the death
of a partner, the title to firm assets vests in the survivors, hut
merely for the purpose 'of settling up the partnership af-
fairs. There is no beneficial right of survivorship, and the

104 Robertson v. Burrell, 110 Cal. 568, 42 Pac. 1086; Valentine v.
YVysor, 123 Ind. 47, 23 N. E. 1076; Mechem's Cases, 382; Cockerham
v. Bosley, 52 La. Ann. 65, 26 So. 814; Coakley's Adm'r v. Hazelwood's
Ex'r, 21 Ky. L. R. 40, 49 S. W. 1067; Heath v. Waters, 40 Mich. 457;
Roberts v. Kelsey, 38 Mich. 602; Ogden v. Astor, 4 Sandf. (N. Y.)
311.

too Little v. Caldwell, 101 Cal. 553, 36 Pac. 107; Galbraith v. Tracy,
153 111. 54, 38 N. E. 937, Burdick's Cases, 257; Denholm v. McKay,
148 Mass. 434, 19 N. E. 551; Bell v. McCoy, 136 Mo. 552, 38 S. W.
329; Case v. Abeel, 1 Paige, Ch. (N. Y.) 393; Ogden v. Astor, 4
Sandf. (N. Y.) 311.

i"1' Oliver v. Forrester, 96 111. 315; Gresham v. Harcourt, 93 Tex.
149, 53 S. W. 1019; Cockerham v. Bosley, 52 La. Ann. 65, 26 So. 814;
Scudder v. Ames, 142 Mo. 187, 43 S. W. 659.

POWERS, RIGHTS, ETC., AFTER. 287

•survivors must account to the representatives of the deceased
partner for his shares.1"7

At common law, partnership obligations were' joint, and
consequently, uppn the death of a partner, his liability was
absolutely discharged, and the creditors could sue the sur-
vivors only.108 In equity, firm creditors have always had a
.remedy against the deceased partner's estate, but whether thai

remedy. is concurrent with the remedy at law against the sur-

"^ . ii . i i *• * ' """

yivors, or whether it can only be resorted to after exhausting,
without avail, the remedy against the survivors^ is a question
upon.jffhich two opposing doctrines prevail.^ It has fre-
quently been said that, in equity, partnership debts are joint
and several.109 And upon this theory the doctrine lias be-
come established, in England and many states in this country,
that creditors of the firm have concurrent remedies against
the estate of the deceased partner and the surviving partners,
and that it is immaterial which remedy is pursued first.110
It is now pretty well recognized that partnership obligations
are joint in equity as well as at law,111 but the doctrine, hav-
ing once been established in these jurisdictions, still pre-
vails. Tn most jurisdictions in this country, however, it i?
~i i , -

held that the firm creditors must exhaust their remedy at law

against the survivors, or show that they are insolvent, before

in . -' —

they can resort to the estate of the deceased partner.112

107 See ante, c. 7.

Jos See ante, p. 284.

io» Bates, Partn. § 748; Wilkerson v. Henderson, 1 Mylne & K. 582.

no Savings & Loan Soc. v. Gibb, 21 Cal. 596; Mason v. Tiffany, 45
111. 392: Doggett v. Dill, 108 111. 560, Burdick's Cases, 495, Mechem's
Cases, 395; Nelson v. Hill, 5 How. (U. S.) 127; Summer v. Powell,
2 Merivale, 30, Turn. & R. 432, 16 Rev. R. 136; Clarke v. Bickers. 14
Sim. 639; In re Hodgson, 31 Ch. Div. 177; Hills v. M'Rae, 9 Hare,
297; Gray v. Chiswell, 9 Ves. 118b; Wilkinson v. Henderson, 1 Mylne
& K. 582; English Partnership Act 1890, § 9.

in Kendall v. Hamilton, 4 App. Cas. 504, Burdick's Cases, 488;
Tn re Hodgson, 31 Ch. Div. 177.

n^Alsop v. Mather, 8 Conn. 584; Currey v. Warrington, 5 Har.

DISSOLUTION.

The direct remedy in equity against the estate of a de-
ceased partner really rests upon a sort of equitable transfer
to the creditor of the surviving partner's right to compel the
estate of a deceased partner to contribute.118

Statutes exisl in many states making partnership obliga-
i ions joint and several. The effect of such statutes is to give
a remedy a1 Law in the first instance against the estate of a
deceased partner.114

The right of joint creditors to compete with separate cred-
itors in the distribution of the estate has already been con-
sidered.115

Same — Of Creditors.

153. Ajpere dissolution doesjotrelieye partners_from ex-
isting liabilities to creditors.

It is obvious that the partners cannot relieve themselves
from their liability to creditors by a mere dissolution, or by
any arrangement between themselves as to the performance of
their obligations,110 though the creditor may, at his option,

(Del.) 147; Gowan v. Tunno, Rich. Eq. Cas. (S. C.) 369; Anderson
v. Pollard, 62 Ga. 46; Pullen v. Whitfield, 55 Ga. 174; Pearson v.
Keddy, 6 B. Mon. (Ky.) 128; Voorhis v. Childs' Ex'r, 17 N. Y. 354,
Burdick's Cases, 490; Pope v. Cole, 55 N. Y. 124; Island Sav. Bank
v. Galvin, 19 R. I. 569, 36 Atl. 1125, Burdick's Cases, 500 (by stat-
ute) ; Sherman v. Kreul, 42 Wis. 33.

113 Voorhis v. Childs' Ex'r, 17 N. Y. 354, Burdick's Cases, 490.

114 Camp v. Grant, 21 Conn. 41; McLain v. Carson, 4 Ark. 164;
Manning v. Williams, 2 Mich. 105; In re Gray's Estate, 111 N. Y.
404, 18 N. E. 719.

us See ante, §§ 129-132.

neGriswold v. Waddington, 16 Johns. (N. Y.) 438; Bronx Metal
Bed Co. v. Wallerstein, 84 N. Y. Supp. 924; Wood v. Braddick, 1
Taunt. 104; Crawshay v. Maule, 1 Swaust. 495; Ex parte Williams,
11 Ves. 3.

POWERS, RIGHTS, ETC., AFTER. 2S9

proceed against the survivor alone. 116a If, however, the
creditor assents to an arrangement between the partners by
which he is to look only to some of them for his debt, the other
partners will be discharged. The rights of creditors have
been sufficiently considered in other sections of this book.117

neaFennell v. Myers, 25 Ky. L. R. 589, 76 S. W. 136. And see
ante, § 122.

iiT See the preceding sections of this chapter. See, also, c. 9,
"Rights and Liabilities as to Third Persons."

19

CHAPTER XII.

JOINT-STOCK COMPANIES.
154-155. Definition and Nature.

Definition and ^Nature.

154. Toint-stock companies are partnersl
stock divided into jtransf erable shares.

155. In the absence of statute, the ordmary principles of _

partnership apply to joint-stock cornpanie^.

The division of the capital stock into a definite number of
shares, of which each member owns one or more, and which
may be transferred to others, or in other words, the absence of
any delectus personarum, is the one essential feature of a
"joint-stock company.1 A transfer of shares does not involve
a dissolution of the company.2 In all other respects, ioint-
stock companies are substantially ordinary partnerships.3
Joint-stock companies are legal at common law.4 In the ab-
sence of statute, they are governed by the articles of associa-

1 Phillips v. Blatchford, 137 Mass. 510; Hedge's Appeal, G3 Pa.
273.

2 Jones v. Clark, 42 Cal. 180; Tyrrell v. Washburn, 6 Allen (Mass.)
466; Carter v. McClure, 98 Tenn. 109, 38 S. W. 585, Burdick's
Cases, 37.

s Hoadley v. County Com'rs of Essex, 105 Mass. 519; Attorney-
General v. Mercantile Marine Ins. Co., 121 Mass. 524; Butterfield v.
Eeardsley, 28 Mich. 412; Wells v. Gates, 18 Barb. (N. Y.) 554; Eliot
v. Himrod, 108 Pa. 569; Wehrman v. McFarlan, 6 Ohio, N. P. 333.

* Phillips v. Blatchford, 137 Mass. 510; Gleason v. McKay, 134
Mass. 419; Harrison v. Heathorn, 6 Man. & G. 81.

DEFINITION AND NATURE. 291

tions and the by-laws,5 and the general principles of partner-
ship already discussed.6 Thus, the members are liable in
solido for all the debts of the company.7 Suits by or against
the company must be brought by or against the individual
members in their individual names.8 No action at law lies
between the members based upon a company claim or liabil-
ity.9 Dissolution may be affected by mutual consent or by a
decree of a court of equity in the same manner that ordinary
partnerships are dissolved.10 The affairs of the company are

5 Cochran v. Perry, 8 Watts & S. (Pa.) 262; Kingman v. Spurr, 7
Pick. (Mass.) 235; Stimson v. Lewis, 36 Vt. 91.

s Pettis v. Atkins, 60 111. 454; Robbins v. Butler, 24 111. 387;
Williams v. Bank of Michigan, 7 Wend. (N. Y.) 539; Skinner v.
Dayton, 19 Johns. (N. Y.) 513; Crater v. Bininger, 45 N. Y. 545;
Hedges' Appeal, 63 Pa. 274; Lafond v. Deems, 52 How. Prac.
(N. Y.) 41.

i Manning v. Gasharie, 27 Ind. 399; Sullivan v. Campbell, 2 Hall
(N. Y.) 271; Skinner v. Dayton, 19 Johns. (N. Y.) 513; Lewis v.
Tilton, 64 Iowa, 220, 19 N. W. 911; Frost v. Walker, 60 Me. 468;
Hedge's Appeal, 63 Pa. 273; Butterfield v. Beardsley, 28 Mich. 412;
Wells v. Gates, 18 Barb. (N. Y.) 554; Tyrrell v. Washburn, 6 Allen
(Mass.) 466; Walburn v. Ingilby, 1 Mylne & K. 61; Hess v. Werts, 4
Serg. & R. (Pa.) 356; Hunnewell v. Willow Springs Canning Co., 53
Mo. App. 245. New members are not liable for debts incurred be-
fore they became members. Lake v. Munford, 4 Smedes & M. (Miss.)
312. A retiring member is not liable, as between himself and the
other members, for either existing or future debts. Stimson v. Lewis,
36 Vt. 91.

s Pipe v. Bateman, 1 Iowa, 369; Kingsland v. Braisted, 2 Lans.
(N. Y.) 17; McGreary v. Chandler, 58 Me. 537; Williams v. Bank of
Michigan, 7 Wend. (N. Y.) 542; Niven v. Spickerman, 12 Johns.
(N. Y.) 401. See, also, Secor v. Lord, 3 Keyes (N. Y.) 525; Habicht
v. Pemberton, 4 Sandf. (N. Y.) 657. Where such companies are or-
ganized under statutes, it is usually provided that the company shall
sue and be sued in its own name, or in the name of some of its offi-
cers. See 11 Am. & Eng. Enc. Law, p. 1052, tit. "Joint Stock Com-
panies."

'J Bailey v. Bancker, 3 Hill (N. Y.) 188; Bullard v. Kinney, 10 Cal.
€0. But see Cross v. Jackson, 5 Hill (N. Y.) 478.

io Mann v. Butler, 2 Barb. Ch. (N. Y.) 362; Von Schmidt v. Hunt-

292 JOINT-STOCK COMPANIES.

managed by officers and directors elected by the members.
Their power to bind the company, when acting within the
scope of their authority, is the same as that of a partner to
bind his firm in ordinary partnership.11

Statutory Provisions.

In some jurisdictions, joint-stuck companies are regulated
by statute. Companies organized under such statutes arc
very nearly in the nature of corporations.12 Of course the
statute will prevail wherever in conflict with the general prin-
ciples of partnership.

ington, 1 Cal. 55; Burke v. Roper, 79 Ala. 138; Allen v. Clark, 65
Barb. (N. Y.) 563.

ii Van Aernam v. Bleistein, 102 N. Y. 355, 7 N. E. 537;; Bodwell
v. Eastman, 106 Mass. 525; French Spiral Spring Co. v. New Eng-
land Car Trust, 32 Fed. 44.

i^Waterbury v. Merchants' Union Exp. Co., 50 Barb. (N. Y.) 157;
Oak Ridge Coal Co. v. Rogers, 108 Pa. 147; School District v. In-
surance Co., 103 U. S. 707; Sanford v. Board of Sup'rs of New York,
15 How. Prac. (N. Y.) 172; Thomas v. Dakin, 22 Wend. (N. Y.) 9;
Maltz v. American Exp. Co., 1 Flip. 611, Fed. Cas. No. 9,002; United
States Exp. Co. v. Bedbury, 34 111. 459.

CHAPTER XIII.

LIMITED PARTNERSHIP.
156-157. Definition and Nature.

Definition and Nature.

156. A limited partnership is a partnership^ wherein the,
UabUity~oTone or more of the members is, by com-
pliance with certain statutory provisions, limited to^
the amountof their contribution to the capital stocky

/

157. Except as provided by statute, the ordinary principles_
applicable to general partnerships are_lully applicable,
to limited partnerships..

In General.

It has been seen, in an ordinary common-law partnership,
that all the partners are liable in solido to the full extent of
their private fortunes for all the firm obligations. In order
to encourage the employment of capital in trade,1 statutes
have been enacted in most of the states, upon compliance with
which partnerships may be formed in which the liability of
one or more of the members is limited to the amount of their
contributions to the capital of the firm. Partnerships
formed under these statutes are usually called "limited part-
nerships," as distinguished from the ordinary or general

i Singer v. Kelly, 44 Pa. 149, Burdick's Cases, 674; Van Riper v.
Poppenhausen, 43 N. Y. 73; Clapp v. Lacey, 35 Conn. 463, Burdick's
Cases, 611; Manhattan Co. v. Laimbeer, 108 N. Y. 582, 15 N. E. 712;
Pars. Partn. § 421.

294: LIMITED PARTNERSHIP.

partnership, wherein the liability of all the members is un-
limited. The term "special partnership" is used in some
states to designate this kind of partnership, but the term
"limited partnership" seems preferable, as "particular part-
nerships,v or partnerships for a single transaction, are some-
times called "special partnerships."

The members of a limited partnership whose liability la
limited are called "special partners." The other members of
the firm are called "general partners."2

Statutory Provisions.

The statutory requirements, by compliance with which the
liability of an ordinary partner may be avoided, are designed
for the protection of persons dealing with the firm. This end
is sought by requiring publicity as to certain facts, so that
persons dealing with the firm may not be misled into extend-
ing credit to persons whom they mistakenly believe to be lia-
ble as general partners,3 and by requirements designed to
make sure that the contribution of the special partner has been
actually paid in and not withdrawn.

The statutes of the various states differ more or less in de-
tail, but they are substantially similar in character. The
statutes all provide in what businesses a limited partnership
engage. These are usually mercantile, mechanical, or manu-
facturing business. Insurance and banking are usually pro-
hibited.

The number of general and special partners is usually
regulated by statute.4

2 For a general discussion of the nature and origin of limited
partnerships, see Ames v. Downing, 1 Bradf. Sur. (N. Y.) 321, Bur-
dick's Cases, 606; Jacquin v. Buisson, 11 How. Prac. (N. Y.) 385;
King v. Sarria, 69 N. Y. 24; Clapp v. Lacey, 35 Conn. 463, Burdick's
Cases, 611.

3 Buck v. Alley, 145 N. Y. 488, 40 N. E. 236, Burdick's Cases, 624.

4 Bernard & Leas Mfg. Co. v. Packard. 64 Fed. 309.

DEFINITION AND NATURE. 295

The statutes usually require the partners to execute a cer-
tificate stating certain facts enumerated in the statute, —
usually the firm name, the nature of the business to be con-
ducted, the names and residences of the general and special
partners, the amount of each partner's contribution, and the
times when the partnership shall commence and terminate.5
This certificate must be acknowledged, recorded, and pub-
lished as required by statute.6

An affidavit is also usually required to the effect that the
contributions stated in the certificate to have been paid in
have been actually so paid in the manner stated. A false
statement in the certificate or affidavit renders all the partners
liable as general partners.7

The contribution of the special partner is usually required
to be made in cash, but some statutes permit the special part-
ner to contribute property. In either case, it is of vital im-
portance that the contribution be in .exact compliance with the
statute, and be actually paid in or turned over to the general
partners before the partnership begins business, for other-

sLachaise v. Marks, 4 E. D. Smith (N. Y.) 610; Metropolitan Nat.
Bank v. Sirret, 97 N. Y. 320, Burdick's Cases, 633; Manhattan Co.
v. Phillips, 109 N. Y. 383, 17 N. E. 129; Gearing v. Carroll, 151 Pa.
79, 24 Atl. 1045; Spencer Optical Mfg. Co. v. Johnson, 53 S. C. 533,
31 S. E. 392.

o Henkel v. Heyman, 91 111. 96; Manhattan Co. v. Laimbeer, 108
N. Y. 578; Manhattan Co. v. Phillips, 109 N. Y. 383, 17 N. E. 129;
Metropolitan Nat. Bank v. Sirret, 97 N. Y. 320, Burdick's Cases, 633;
Bowen v. Argall, 24 Wend. (N. Y.) 496; Smith v. Argall, 6 Hill
(N. Y.) 479, 3 Den. (N. Y.) 435; Madison County Bank v. Gould, 5
Hill (N. Y.) 309; Tracy v. Tuffly, 134 U. S. 206, Burdick's Cases. 647.

7 Crouch v. First Nat. Bank, 156 111. 342, 40 N. E. 974, Burdick's
Cases, 667; Wilson v. Bean, 33 111. App. 529; Durant v. Abendroth,
69 N. Y. 148; Van Ingen v. Whitman, 62 N. Y. 513; Ropes v. Colgate,
17 Abb. N. C. (N. Y.) 143; Tilge v. Brooks, 124 Pa. 178, 16 Atl. 746;
Robbins Elec. Co. v. Weber, 172 Pa. 635, 34 Atl. 116; Sheble v. Strong,
128 Pa. 315, 18 Atl. 397; Ussery v. Crusman (Tenn. Ch.), 47 S. W.
C67; Chick v. Robinson, 95 Fed. 619.

or>H LIMITED PARTNERSHIP.

Aviso no limited partnership will be formed, and all the mem-
bers will be Liable as general partners.8

It is usually provided that the business of the firm shall be
conducted under a firm name, in which the names of the spe-
cial partners shall not appear, and without the addition of
the word "company," or any other general or equivalent
term.9

In some states the statute requires the firm to post in a con-
spicuous place sonic sign on which is painted, in full, the
names of all the members of the partnership, stating who are
genera] and who are special partners.10

Withdrawal, Alteration, and Interference.

The statutes all forbid the withdrawal in any manner by
I'm- special partner of any part of his contribution. In some
states it is provided that, if he does withdraw, he must restore
it with interest, In other states such withdrawal renders the
special partner liable as a general partner.11

sHolliday v. Union & Paper Bag Co., 3 Colo. 342; Lineweaver v.
Slagle, 64 Md. 465, 2 Atl. 693; Pierce v. Bryant, 5 Allen (Mass.) 91;
Haggerty v. Foster, 103 Mass. 17; Myers v. Edison Gen. Elec. Co.,
59 N. J. Law, 153, 35 Atl. 1069; Hotopp v. Huber, 160 N. Y. 524, 55
N. E. 206, affirming 16 App. Div. 327, 44 N. Y. Supp. 617; Van Ingen
v. "Whitman, 62 N. Y. 513; Metropolitan Nat. Bank v. Sirret, 97 N. Y.
320; Manhattan Co. v. Phillips, 109 N. Y. 383, 17 N. E. 129; Ropes
v. Colgate, 17 Abb. N. C. (N. Y.) 143; Durant v. Abendroth, 69 N. Y.
148; Richardson v. Hogg, 38 Pa. 153; Rehfuss v. Moore, 134 Pa. 462,
19 Atl. 756; Reynolds v. Creveling, 177 Pa. 267, 35 Atl. 686. Con-
tribution of check is sufficient though it is not paid until after the
filing of the certificate. Chick v. Robinson, 95 Fed. 619.

n Groves v. Wilson, 168 Mass. 370, 47 N. E. 100; Burdick's Cases,
630; Buck v. Alley, 145 N. Y. 488, 40 N. E. 236, Burdick's Cases. 624;
Buck v. Alley, 82 Hun, 29, 31 N. Y. Supp. 324; Andrews v. Schott,
10 Pa. 47; Hubbard v. Morgan, Fed. Cas. No. 6,817.

io Gearing v. Carroll, 151 Pa. 79, 24 Atl. 1045.

ii Beers v. Reynolds, 11 N. Y. 97; Baily v. Hornthal, 154 N. Y.
648, 49 N. E. 56; Lachaise v. Marks, 4 E. D. Smith (N. Y.) 610;

DEFINITION AND NATURE. 297

In most states it is provided that every alteration which
shall be made in the names of the original partners, the nat-
ure of the business, or in the capital or shares thereof, or in
any other matter specified in the original certificate, shall be
deemed a dissolution of the limited partnership, and, if the
partnership is carried on after such alteration, it shall be
deemed a general partnership unless renewed as a limited
partnership, as provided by statute.12

The statutes also provide that the general partners only
shall be authorized to transact business and sign for the part-
nership, and provide that if the special partner transacts busi-
ness for the firm, or interferes in any way, he shall be deemed
a general partner.13

Necessity of Compliance with Statute.

A limited partnership is a true partnership, and is_^ass.
erned by all the principles applicable to ordinary partnerships.
except so far fas the statute has provided otherwise.14 Accord-
ingly, all the meml)ers are liable as general partners unless
the statutory provisions have been at least substantially, and
according to many cases, strictly complied with.10 "A lim-

George v. Carpenter, 73 Hun, 221, 25 N. Y. Supp. 1086; Coffin's Ap-
peal, 106 Pa. 280; Masters v. Lauder, 131 Pa. 195, 18 Atl. 872.

12 Sarmiento v. The Catherine C, 110 Mich. 120, 67 N. W. 1085,
Burdick's Cases, 678; Perth Amboy Mfg. Co. v. Condit, 21 N. J. Law,
659, Burdick's Cases, 673; Hayes v. Heyer, 35 N. Y. 326; Buckley v.
Lord, 24 How. Prac. (N. Y.) 455; Seibert v. Bakewell, 87 Pa. 506;
Singer v. Kelly, 44 Pa. 145, Burdick's Cases, 674.

"Columbia Land & Cattle Co. v. Daly, 46 Kan. 504, 20 Pac. 1042;
Farnsworth v. Boardman, 131 Mass. 115; .Taffe v. Krura, 88 Mo. 669;
Continental Nat. Bank v. Strauss, 137 N. Y. 148, 32 N. E. 1066, Bur-
dick's Cases, 619; Sharp v. Hutchinson, 100 N. Y. 533, 3 N. E. 500;
First Nat. Bank v. Whitney, 4 Lans. (N. Y.) 34; McKnight v. Rat-
cliff, 44 Pa. 156.

n Ames v. Downing, 1 Bradf. Sur. (N. Y.) 321, Burdick's Cases,
606; Wilkins v. Davis, 2 Low. 511, Fed. Cas. No. 17,664.

"Manhattan Brass Co. v. Allin, 35 111. App. 336; Richardson v.

298 LIMITED PARTNERSHIP.

ited partnership that has not complied with the law of its cre-
ation is not a limited partnership at all. It is, however, a
partnership in which all the members are liable as at common
law." 1G Where an attempt is made to form a limited part-
nership to engage in an unauthorized or prohibited business,,
the partnership is an ordinary one, and all the partners are
liable as general partners.17

Dissolution and Renewal.

Upon the expiration of the times s.pecjflH in d™ oavtifi \
the limited partnershijj^gmes^o jtn end, and notice of dissolu-

Carlton, 109 Iowa, 515, 80 N. W. 532; Lineweaver v. Slagle, 64 Md..
465; Pierce v. Bryant, 5 Allen (Mass.) 91, Burdick's Cases, 631;
In re Allen, 41 Minn. 430, 43 N. W. 382; Selden v. Hall, 21 Mo. App.
452; White v. Eiseman, 134 N. Y. 101, 31 N. E. 276, Burdick's Cases,
640; Manhattan Co. v. Laimbeer, 108 N. Y. 578, 15 N. B. 712; Jacquin
v. Buisson, 11 How. Prac. (N. Y.) 393; Haddock v. Grinnell Mfg.
Corp., 109 Pa. 372, 1 Atl. 174; Briar Hill C. & I. Co. v. Atlas Works,
146 Pa. 290, 23 Atl. 326; Andrews v. Schott, 10 Pa. 47; Richardson
v. Hogg, 38 Pa. 155; Vandike v. Rosskam, 67 Pa. 330; Maloney v.
Bruce, 94 Pa. 249; Eliot v. Himrod, 108 Pa. 579; Hite Natural Gas
Co.'s Appeal, 118 Pa. 436, 12 Atl. 267; Hill v. Stetler, 127 Pa. 145,
13 Atl. 306, 17 Atl. 887; Vanhorn v. Corcoran, 127 Pa. 255, 18 Atl.
16; Sheble v. Strong, 128 Pa. 315, 18 Atl. 397; In re Gibbs' Estate,
157 Pa. 59, 28 Atl. 1023; In re Merrill, 12 Blatchf. 224, Fed. Cas.
No. 9,467; Spencer Optical Mfg. Co. v. Johnson, 53 S. C. 533, 31 S. E.
392. But compare Tracy v. Tuffly, 134 U. S. 206, Burdick's Cases,
647; Staver & Abbott Mfg. Co. v. Blake, 111 Mich. 282, 69 N. W. 508;
Alleghany Nat. Bank v. Bailey, 147 Pa. Ill, 23 Atl. 439. Statutes
providing for the formation of limited partnerships should receive
a reasonable construction, and not such as to make its formation
almost impossible. Manhattan Co. v. Laimbeer, 108 N. Y. 582, 15
N. E. 712. Where the parties agreed to create a limited partner-
ship, and conducted their business as such, each is estopped as
against the other to say that there never was a complete formation
of such partnership, because the statutory requirements were not
literally complied with. Casola v. Kugelman, 33 App. Div. 428, 54
N. Y. Supp. 89; Ussery v. Crusman (Tenn. Ch.), 47 S. W. 567.

ia Blumenthal v. Whitaker, 170 Pa. 309, 33 Atl. 103.

« McGehee v. Powell, 8 Ala. 827.

DEFINITION AND NATURE.

299

tiATTigjinf, npoggapry.18 The partnership may be renewed by
certificate acknowledged, recorded, and published in the man-
ner required for the original formation. If the businesa-ia.

continued without renewal, the partnership is a general, and
notalimited, partnership.19

isHaggerty v. Taylor, 10 Paige (N. Y.) 261; Marshall v. Lambeth,
7 Rob. (La.) 471; Tilge v. Brooks, 124 Pa. 178, 16 Atl. 746.

is Columbia Bank v. Berolzheimer, 33 App. Div. 235, 53 N. Y. Supp.
417; Fifth Ave. Bank v. Colgate, 120 N. Y. 381, 24 N. E. 799; Fourth
St. Nat. Bank v. Whitaker, 170 Pa. 297, 33 Atl. 100, Burdick's Cases,
655; Hogan v. Hadzsits, 113 Mich. 568, 71 N. W. 1092, Burdick's-
Cases, 660; Arnold v. Danziger, 30 Fed. 898.

TABLE OF CASES.

References are to pages.

A.

Aas v. Benham, 154, 156, 157,

158.
Abat v. Penny, 99.
Abbot v. Johnson, 265, 273.
Abbott v. Omaha S. & R. Co.,

63.
Abel v. Sutton, 212.
Abernathy v. Latimore, 241.
Account of Wells In re, 265.
Ach v. Barnes, 216.
Ackley v. Staehlin, 247.
Adam v. Newbigging, 22.
Adams v. Adams, 112.

v. Albert, 231.

v. Ashman, 181.

v. Bankart, 191.

v.Carter, 14, 32, 41, 44.

v. Church, 104.

v. Funk, 94.

v. Hackett, 228.

v. Morrison, 30.

v. Shewalter, 270.

v. Sturges, 203, 228, 236.
Adamson v. Jarvis, 161.
Addison v. Gandassequi, 250.
Agace, Ex parte, 182.
Ah Lep v. Gong Choy, 78, 195.
Aigen v. Boston & M. Railroad,

46.
Airey v. Borham, 164.
Alabama Fertilizer Co. v. Rey-
nolds, 45, 181, 185, 186.

Alabama Marble & Stone Co. v.
Chattanooga Marble & Stone
Co., 131.
Alderson v. Popes, 67, 73.
Aldrich v. Wallace, 137.
Alexander v. Gorman, 237.
Allcott v. Strong, 218.
Alleghany Nat. Bank v. Bailey,

298.
Allen, In re, 298.

Allen v. Center Valley Co., 223,-
226, 230.
v. Clark, 292.
v. Davis, 41, 44.
v. Dunn, 71.
v. Erie City Bank, 253.
v. Farrington, 187.
v. Hawley, 176.
v. Woonsocket Co., 91.
Allison v. Perry, 86, 125.
Alsop v. Mather, 287.
Alvord v. Smith, 8.
Ambler v. Bradley, 41.
American Cent. R. Co. v. Miles,

242.
American Salt Co. v. Heiden-

heimer, 62.
Ames v. Downing, 261, 285, 294,.

297.
Amsinck v. Bean, 230, 238, 239.
Anderson v. Chenney, 138.
v. Lemon, 155.
v. Norton, 106, 224.
v. Pollard, 285, 288.

302

TABLE OF CASES.

References are to pages.

Anderson v. Powell, 95.
Anderton v. Shoup, 250.
Andress v. Miller, 230.
Andrews, Ex parte, 239.
Andrews v. Keith, 138.

v. Planters' Bank, 192.

v. Schott, 296, 298.
A. N. Kellogg Newspaper Co. v.

Farrell, 21, 32.
Anonymous, 272.
Appleton v. Binks, 198, 249.
Apsey, Ex parte, 199, 204.
Arbuckle v. Taylor, 202.
Armstrong v. Robinson, 103.
Arnold v. Arnold, 252, 254.

v. Brown, 262.

v. Danziger, 299.

v. Hagerman, 225.

v. Hart, 214.

v. Morris, 248.

v. Nicols, 211.

v. Wainwright, 176.
Arnstaedt v. Blumenfeld, 108.
Arthur v. Griswold, 284.
Artman v. Ferguson, 90.
Arundell v. Bell, 111.
Ash v. Guie, 54.
Ashbrook v. Ashbrook, 168.
Ashworth v. Stanwix, 200.
Askew v. Silman, 212, 216.

v. Springer, 151, 163.
Atkins v. Hunt, 50, 54.

v. Saxton, 138, 139.
Atlantic Glass Co. v. Paulk, 241.
Attaway v. Third Nat. Bank, 96.
Attorney-General v. Mercantile
Marine Ins. Co., 290.

v. Stranyforth, 200, 202.
Attwater v. Fowler, 252.
Atwood v. Gillett, 262.
Aubert v. Maze, 162.
Aurora State Bank v. Oliver, 90.
Austin v. Holland, 214, 216.

v. Thomson, 45.

Austin v. Williams, 103, 105.
Avery v. Craig, 265.
Avritt v. Russell, 137.

B.

Babcock v. Hermance, 270.

v. Stewart, 10.
Backus v. Fobes, 220.
Badeley v. Consolidated Bank,

21, 40.
Badger v. Daenieke, 243.
Bagley v. Smith, 255, 267.
Bagnetto v. Bagnetto, 270.
Bailey v. Bancker, 391.

v. Clark, 41, 183.
Baily v. Hornthal, 296.
Baird v. Planque, 73.
Baker v. Cummings, 153.

v. Stackpole, 218.
Baker's Appeal, 226, 232.
Baldwin v. Burrows, 52.
Bambrick v. Simms, 252, 254.
Bancroft v. Hambly, 49, 60, 84.

v. Haworth, 106.
Bank v. Carrollton R. Co., 128,
131, 269.
v. Gibson, 112.
Bank of Arthur v. Ellars, 245,

246, 247.
Bank of Australasia v. Breillat,

190.
Bank of British North America

v. Delafield, 252, 254.
Bank of Buffalo v. Thompson,

100.
Bank of Montreal v. Page, 264,

278.
Bank of New Orleans v. Matt-
hews, 214.
Bank of Rochester v. Monteath,

107, 108, 197.
Bank of Scott City v. Sandusky,

210.

TABLE OF CASES.

303

References are to pages.

Bank of Toronto v. Nixon, 97.
Banks v. Evans, 138.

v. Gibson, 112.
Banner v. Schlessinger, 201.
Banner Tobacco Co. v. Jenison,

183.
Bannister v. Miller, 225.
Barber v. Crowell, 124.

v. Smith, 240.
Barcroft v. Haworth, 189.
Bardwell v. Perry, 230, 236.
Barfield v. Loughborough, 166.
Barfoot v. Goodall, 216.
Bariness Wenlock v. River Dee

Co., 199.
Baring v. Crafts, 105.
Barlett v. Smith, 212.
Barnard v. Lapeer & P. H. Plank

Road Co., 184.
Barnes v. Northern Trust Co.,
274, 276.

v. Barrow, 243.
Barrett v. McKenzie, 138.
Barrow, Ex parte, 12.
Barry v. Briggs, 129, 280, 283.

v. Jones, 163.
Bartle v. Nutt, 95.
Bartlett v. McRae, 218.

v. Meyer-Schmidt Grocer Co.,
225.

v. Powell, 67.
Barton v. Lovejoy, 281.
Bass v. Taylor, 275.
Bass Dry Goods Co. v. Granite

City Mfg. Co., 278, 282.
Bassett v. Miller, 129, 280, 284.

v. Shepardson, 262.
Bast's Appeal, 157.
Bates v. Babcock, 86, 94.

v. Lane, 160, 255.

v. Wills Point Bank, 219.
Battley v. Lewis, 51, 53.
Bawden v. Howell, 244.
Baxter v. Rollins, 183.

Baxter v. West, 272.
Beacannon v. Liebe, 253.
Beach v. Hayward, 284.
Beakes v. Da Cunha, 243.
Beale v. Caddick, 218.
Beall v. Lowndes, 91.
Beard v. Webb, 89.
Beardsley v. Hall, 277.
Beatty v. Wray, 163.
Beaumont v. Greathead, 217.

v. Meredith, 54.
Beckham v. Drake, 16, 188, 199.
Beckwith v. Talbot, 45.
Bedford v. Deakin, 220.
Beebe v. Rogers, 197.
Beecher v. Bush, 21, 22, 24, 25,

28, 32, 33, 41, 44, 65, 71.
Beers v. Reynolds, 296.
Behrens v. McKenzie, 88.
Belcher v. Conner, 92.

v. Whittemore, 158.
Bell v. McCoy, 286.

v. Morrison, 277.

v. Newman, 236.
Belshaw v. Colie, 242.
Belton v. Fisher, 284.
Bender v. Hemstreet, 188.
Benjamin v. Covert, G7, 68, 215.

v. Porteus, 41.
Bennett v. Pulliam, 6.
Benson v. Hadfield, 221.
Bentley v. Craven, 156.
Benton v. Roberts, 189.
Bergman v. Jones, 225.
Bering v. Grafts, 12.
Berkeley v. Hardy, 19S.
Berkshire Woolen Co. v. Julllard,

198.
Bernard & Leas Mfg. Co. v. Pack-
ard, 294.
Bernheimer v. Rindskopf, 224,

225.
Berry v. Cross, 176, 272.

v. DeBruyn, 254, 255.

30J:

TABLE OF CASES.

References are to pn^.'s.

Berry v. Folkes, 184, 261, 265.
Berthold v. Goldsmith, 27.
Bestor v. Barker, 22, 153.
Bethel v. Judge of Superior

Court, 248.
Betts v. Gibbins, 161.
Beudel v. Hettrick, 73.
Bevan v. Lewis, 199.

Bickford v. First Nat. Bank,
250.
Bidwell v. Madison, 52.
Bienenstok v. Ammidown, 204.
Bigelow v. Elliott, 22, 30, 46, 77.

v. Gregory, 63.

v. Reynolds, 244.
Biggs v. Lawrence, 245.
Bignold v. Waterhouse, 204.
Billings v. Meigs, 247.
Billingsley v. Dawson, 269.
Binns v. Waddill, 247.
Bird v. Fake, 242.

v. Hamilton, 149.
Bisel v. Hobhs, 104.
Bishop v. Austin, 248.

v. Breckles, 272.

v. Countess of Jersey, 204.

v. Georgeson, 4, 67.

v. Hall, 243.
Bissell v. Foss, 10.

v. Michigan Southern R. Co.,
91.
Bixler v. Kresge, 88.
Black v. Seipt, 126.
Black's Appeal, 226, 230, 234.
Blackburn Bldg. Sov. v. Cunliffe,

199.
Blackford, In re, 207, 235.
Blackwell v. Rankin, 256.
Blades v. Free, 214.
Blair v. Black, 236.

v. Bromley, 204.
Blake v. Dorgan, 267.

v. Sweeting, 265, 269.
Blaker v. Sands, 269.

Blanchard v. Jefferson, 254.

Blew v. Wyatt, 220.

Blisset v. Daniel, 149, 150, 172,

174, 175.
Block v. Fitchburg R. Co., 45.
Blodgett v. American Nat. Bank,
261.
v. City of Muskegon, 279.
v. Sleeper, 245, 246.
Bloodgood v. Bruen, 281, 2S4.
Bloom v. Lofgren, 153.
Bloomfield v. Buchanan, 38, 84.
Bloxham v. Pell, 14.
Blue v. Leathers, 41, 44.
Blumenfeld v. Seward Bros., 138.
Blumenthal v. Whitaker, 298.
Blyth v. Fladgate, 201, 205, 207.
Boardman v. Close, 151.
Bodwell v. Eastman, 292.
Boggess v. Lilly, 162.
Bohler v. Tappan, 283.
Bohrer v. Drake, 47, 264.
Bolton v. Puller, 226.
Bonbonus, Ex parte, 191.
Bond v. Gibson, 188.
v. Hays, 253.
v. Pittard, 39, 41.
Bonfield v. Smith, 206.
Bonwitt v. Heyman, 224.
Booe v. Caldwell, 73.
Booth v. Briscoe, 244.

v. Farmers' & Mechanics'

Nat. Bank, 155, 217.
v. Wonderly, 62.
Bopp v. Fox, 85, 86, 125, 131, 132,

145.
Boston & Colorado Smelting Co.

v. Smith, 15, 22, 30, 31, 32, 48,

50.
Bostwick v. Champion, 45.
Botsford v. Kleinhans, 218.
Bouker Contracting Co. v. Scrib-

ner, 215, 216.
Bourne v. Freeth, 69.

TABLE OF CASES.

305

References

Bovill v. Wood, 222.
Bowen v. Argall, 295.
v. Richardson, 95.
Bower v. Swadlin, 219.
Bowker v. Bradford, 90.
Boyd v. McCann, 68.
Bracken v. Kennedy, 251.
Bradbury v. Dickens, 110.
Bradford v. Kimberly, 163.
Bradley v. Brigham, 166.
v.Ely, 21, 23, 26, 27.
v. Harkness, 11.
Brady v. Chicago & G. W. R. Co.,

59.
Braruah v. Roberts, 189.
Brandon v. Conner, 13, 15.
Brann v. Wollacott, 242.
Brayton v. Sherman, 226.
Breard v. Blanks, 56.
Breckinridge v. Shrieve, 189.
Breen v. Richardson, 283.
Brennan v. Pardridge, 103.
Breslin v. Brown, 92.
Brettel v. Williams, 184, 192.
Brewer v. Browne, 136, 145.
Brewster v. Mott, 247.
Briar Hill C. & I. Co. v. Atlas

Works, 298.
Brick, In re, 222.
Bridges v. Wm. C. Sprague &

Pembroke Iron Co., 32.
Briggs v. Briggs, 274.
v. Partridge, 249.
v. Vanderbilt, 45.
Bright v. Hutton, 60.
Brink v. New Amsterdam Fire

Ins. Co., 50.
Brisban v. Boyd, 213, 276.
Bristol v. Sprague, 277.
Broad foot v. Fraser, 137.
Broadway Nat. Bank v. Wood,

231.
Bromley v. Elliot, 15, 19, 21, 183,

196.

are to pages.

Bronx Metal Bed Co. v. Waller-
stein, 288.
Brooke v. Enderby, 218.

v. Washington, 119, 120, 180,
181, 183, 188, 196, 208.
Brooks v. Martin, 96.
Brooks-Waterfield Co. v. Carpen-
ter, 183, 185, 199.

v. Jackson, 185.
Brophy v. Holmes, 93.
Broughton v. Manchester & Sal-
ford Waterworks Co., 189.
Brown v. Allen, 284.

v. Bamberger, 278.

v. Birdsall, 248.

v. Chancellor, 262.

v. Clark, 279.

v. Fitch, 206.

V.Foster, 215, 216.

v. Hicks, 271.

v. Jaquette, 32, 41, 44.

v. Jewett, 89.

v. Lawrence, 104.

v. Leonard, 41, 67, 73.

v. Oakshot, 123.

v. Pickard, 105.

v. Stewart, 234, 236.

v. Watson, 283.
Brown's Adm'r v. Johnson, 249.
Brown's Appeal, 166, 237.
Brown's Ex'rs v. Brabham, 218.
Brownell v. Steere, 163, 171.
Brundage v. Mellon, 201.
Brunson v. Morgan, 125.
Brydges v. Branfill, 201.
Buchan v. Sumner, 132, 143.
Buchanan v. Curry, 191, 263.
Buchoz v. Grandjean, 191.
Buck v. Alley, 204, 296.

v. Mosley, 247.

v. Smith, 258, 259, 265.
Buckan v. Sumner, 233.
Buckhause, In re, 233.
Buckingham v. Hanna, 7, 9.

306

TABLE OF CASES.

References

Buckingham v. Ludlum, 165.
Buckley v. Barber, 129.

v. Buckley, 132, 143.

v. Lord, 297.

v. Wood, 186.
Buckman v. Barnum, 47.
Buckmaster v. Gowen, 255.
Buckner v. Lee, 13, 14, 16.
Buettner v. Steinbrecher, 191.
Bulfinch v. Winchenbach, 58.
Bulger v. Rosa, 225.
Bull v. Coe, 255.
Bullard v. Kinney, 291.
Bullen v. Sharp. 36. 37, 66.
Bullock v. Hubbard, 91, 230.
Bult v. Morrell, 189.
Bumpus v. Turgeon, 242.
Burchell v. Wilde, 112.
Buchinell v. Koon, 283.
Burckle v. Eckhart, 30.
Burdon v. Barkus, 122.
Burfield v. Rouch, 135.
Burgan v. Cahoon, 72.

v. Lyell, 10, 182, 214.
Burgess v. Badger, 163, 164, 266.
Burke v. Roper, 292.
Burls v. Smith, 54.
Burland v. Nash, 218.
Burley v. Harris, 251.
Burnett v. Snyder, 6, 7, 12, 13,

18, 25, 30.
Burney v. Boone, 255.

v. Savannah Grocery Co., 90,
262.
Burns v. Nottingham, 252.

v. Pillsbury, 218.
Burr v. De La Vergne, 159.
Burt v. Lathrop, 54.
Burton v. Goodspeed, 29.
Burwell v. Springfield, 247.
Burwitz v. Jeffers, 243.
Bush v. Clark, 129, 229.

v. Linthicum, 88.

v. Stowell, 277.

are to pages.

Bushnell v. Consolidated Ice

Mach. Co., 4.
Butchart v. Dresser, 191, 274, 275,

283.
Butler v. American Toy Co., 91,
261.
v. Butler, 90.
v. Finck, 49.
Butler Sav. Bank v. Osborne, 56,

57.
Butterfield v. Beardsley, 290,

291.
Button v. Hoffman, 59.
Buzard v. First Nat. Bank, 30.
Bybee v. Hawkett, 10, 12.
Byington v. Gaff, 104.
Byrd v. Fox, 252.
Byrne v. Reid, 9.

O.

Cadenasso v. Antonelle, 31.
Caldicott v. Griffiths, 54.
Caldwell v. Leiber, 164.

v. Stileman, 69.
Calkins v. Smith, 244.
Cameron v. Blackman, 188.
Camp v. Grant, 288.
Campbell v. Bowen, 194.

v. Campbell, 170.

v. Colorado Coal & Iron Co.,
106.

v. Mullett, 57.
Canada v. Barksdale. 94.
Canales v. Perez, 138.
Cannon v. Brush Elec. Co., 21,

62.
Capen v. Barrows, 253.
Capper's Case, 60.
Caris v. Nimmons, 182.
Carleton v. Jenness, 284.
Carlton v. Cummins, 265.
Carpenter v. Greenop, 251.
Carr v. Catlin, 281.

TABLE OF CASES.

307

References are to pages.

Carr v. Hertz, 194.

v. Leavitt, 86.
Carroll v. Evans, 269.
Carter, Ex parte, 238.
Carter v. Bradley, 131.

v. Carter, 4G, 93.

v. Home, 155.

v. McClure, 290.

v. Rowland, 269.

v. Whalley, 215.
Carver Gin & Mach. Co. v. Ban-

non, 224.
Case v. Abeel, 286.

v.Beauregard, 131, 176, 224,
226, 231, 232.
Casey v. Carver, 180, 247.
Cash v. Earnshaw, 272, 273.
Casola v. Kugelman, 298.
Cassels v. Stewart, 156.
Cassidy v. Hall, 18, 30, 31, 67,

71, 73.
Castle v. Bullard, 201.
Caston v. Drake, 95.
Catskill Bank v. Gray, 91.
Cavander v. Bulteel, 177.
Cedarburg v. Guernsey, 41.
Central Bank of London, Ex

parte, 212.
Central City Sav. Bank v.

Walker, 6, 21, 62.
Central Trust & Safe Deposit Co.

v. Respass, 95.
Chamberlain v. Jackson, 49.

v. Sawyers, 117, 163.
Champion v. Bostwick, 41, 122,

201.
Chandler v. Higgins, 221.
Channel v. Fassitt, 6, 12.
Chapman v. Hughes, 22, 24.

v. Lipscomb, 30.
Chappie v. Cadell, 150.

v. Davis, 188.
Charlton v. Sloan, 170.
Charman v. Henshaw, 103.

Chase v. Barrett, 47.

v. Stevens, 49, 57.
Cheap v. Cramond, 13, 14.
Cheesman v. Price, 273.
Cheetham v. Ward, 219.
Chester v. Dickerson, 86, 94,

200, 201.
Chick v. Robinson, 295, 296.
Childers v. Neely, 10, 11.
Chippendale, Ex parte, 160, 161,

166, 199.
Chisholm v. Cowles, 48.
Chittenden v. Witbeck, 155.
Choppin v. Wilson, 137.
Chouteau v. Raitt, 35.
Christ v. Firestone, 188.
Christian & Craft Grocery Co. v.

Hill, 160.
Christy v. Sill, 8.
Church v. First Nat. Bank, 245,
246, 247.

v. Knox, 139.

v. Sparrow, 190.
Citizens' Bank v. Williams, 223.
Citizens' Fire Ins. etc. Co. v.

Doll, 115.
Citizens' Nat. Bank v. Wehrle,

224.
City Bank v. McChesney, 216.
City Nat. Bank v. Stone, 22.
City of Maquoketa v. Willey, 225.
City of Opelika v. Daniel, 241.
Clafflin Co. v. Evans, 192.
Clagett v. Kilbourne, 139.
Clapp v. Lacey, 293, 294.

v. Rogers, 216.
Clark v. Amoskeag Mfg. Co., 250.

v. Billings, 220.

v. Carr, 269.

v. Houghton, 104.

v. Reed, 279.

v. Worden, 166, 167.
Clark's Appeal, 113.
Clarke v. Bickers, 287.

30 S

TABLE OF CASES.

References are to pages.

Clarke v. Wallace, 192.
Clay v. Field, 280.

v. Freeman, 129.
Clayton v. Davett, 160, 162.

v. May, 208.
Clayton's Case, 204, 218, 219.
Cleather v. Twisden, 203.
Clegg v. Edmonson, 258.
Clement v. British American
Assur. Co., 197.

v. Clement, 214, 277.
Clements v. Jessup, 113, 137, 225.

v. Norris, 172, 194.
Cleveland v. Woodward, 196.
Cleveland Paper Co. v. Courier

Co., 91.
Clift v. Barrow, 39, 41.
Clifton v. Howard, 35, 36.
Clough, In re, 191, 275.
Coakley's Adm'r v. Hazelwood's

Ex'r, 285, 286.
Coates v. Preston, 207.
Cobb v. Benedict, 252.
Cochran v. Anderson Co. Nat.
Bank, 80.

v. Arnold, 63.

v. Cunningham's Ex'r, 245,
246.

v. Hirsch Bros., 109.

v. Perry, 8, 291.
Cochrane v. dishing, 284.
Cocke v. Branch Bank at Mo-
bile, 190.

v. Evans' Heirs, 116.
Cockerham v. Bosley, 283, 286.
Codding, In re, 143.
Coe v. Simmons Boot & Shoe Co.,

229.
Coffin's Appeal, 297.
Coggswell v. Coggswell, 265.
Cohn v. Hessel, 169.
Coldren v. Clark, 168.
Cole v. Fowler, 251.

v. Moxley, 267.

Cole v. Reynolds, 253.

Coleman v. Coleman, 155.
v. Eyre, 85, 92.

Coles v. Coles, 131.

Collingwood v. Berkeley, 68.

Collins* Appeal, 128.

Collman v. Mills, 200.

Collner v. Greig, 119.

Collumb v. Read, 143, 146.

Columbia Bank v. Berolzheimer,
299.

Columbia Land & Cattle Co. v.
Daly, 297.

Commercial Bank v. Jones, 220.
v. Miller, 276.

Commercial Nat. Bank v. Proc-
tor, 112. ,

Commonwealth v. Bennett, 30.
v. Bracken's Heirs, 285.

Corns toe k v. Buchanan, 156, 269.
v. McDonald, 144, 285.

Conklin v. Tuthill, 30.

Connor v. Allen, 280.

Conrader v. Cohen, 237.

Conroy v. Campbell, 116.

Const v. Harris, 150, 172, 173.

Continental National Bank v.
Strauss, 88, 297.

Conwell v. McCowan, 221.

Cook, Ex parte, 233, 235.

Cook, In re, 226.

Cook v. Carpenter, 6, 51?.
v. Collingridge, 134, 135.
v. Penrhyn Slate Co., 66, 71,
72.

Cooke v. Benbow, 167.

Cookson v. Cookson, 141.

Coope v. Eyre, 39, 56.

Cooper v. Nelson, 251.

Cooper's Appeal, 228.

Copland, Ex parte, 236.

Copland v. Toulmin, 117.

Corbett, Ex parte, 97.

Corder v. Steiner, 281.

TABLE OF CASES.

309

References

Corey v. Cadwell, 94.

v. Perry, 222.
Cornells v. Stanhope, 245, 246.
Corner v. Mackey, 210.
Cory v. Long, 176.
Cory Bros. & Co. v. Owners of

the Mecca, 218, 219.
Cossack v. Burgwyn, 19.
Coster v. Clarke, 132.
Costley v. Wilkerson's Adm'r,

284.
Cothran v. Marmaduke, 38, 47.
Cottle v. Leitch, 273.
Cottrell v. Babcock Printing

Press Mfg. Co., 112.
Cotzhausen v. Judd, 184, 247.
Couch v. Mills, 219.

v.Woodruff, 25.
Course v. Prince, 256.
Coursin's Appeal, 57, 152, 154.
Court v. Berlin, 187, 213.
Courtenay v. Wagstaff, 53.
Cowan v. Gill, 238.

v. Roberts, 216.
Cowles v. Robinson, 250.
Cox v. Delano, 26.

v. Gille Hardware & Iron
Co., 206, 248.

v. Hickman, 3, 12, 13, 16, 17,
18, 19, 20, 21, 26, 28, 29,
33, 34, 35, 37, 180, 184.

v. Hubbard, 242.

v.Russell, 139.

v. Swofford Bros. Dry Goods
Co., 192.
Craft v. McConoughy, 95.
Cragg v. Ford, 160.
Craig v. Hulschizer, 245, 2-t6.
Craighead v. Pike, 134.
Crane Co. v. Tierney, 183, 184,

188.
Crane's Estate, In re, 283.
Crater v. Bininger, 252, 254, 291.
Craven v. Edmondson, 275.

are to pages.

Crawford v. Collins, 106, 107,

240.
Crawshay v. Collins, 116, 133,
148, 149.

v. Maule, 11, 122, 125, 134,
141, 261, 265, 288.
Crazebrook, Ex parte, 239.
Credit Mobilier v. Common-
wealth, 47.
Crescent Ins. Co. v. Bear, 96.
Croft v. Pyke, 177.
Crompton v. Conkling, 222.
Crone v. Crone, 121.
Crooker v. Crooker, 176, 233.
Croone v. Bivens, 226.
Crosby v. Jeroloman, 206.

v. Timolat, 253.
Cross v. Burlington Nat. Bank,
100.

v. Jackson, 291.

v. Pinckneyville Mill Co., 62.
Crosswell v. Lehman, 155.
Crosthwaite v. Ross, 189.
Crouch v. Bowman, 105.

v. First Nat. Bank, 295.
Crowder, Ex parte, 234.
Crozier v. Kirker, 103.
Culley v. Edwards, 22, 31.
Cumming's Appeal, 228.
Cummings v. Mills, 39.
Cumpston v. McNair, 48.
Cundey v. Hall, 121.
Cunningham v. Littlefield, 255.
Currey v. Warrington, 207, 287.
Curry v. Fowler, 30, 31.
Curtis v. Hollingshead, 100, 206.

v.Woodward, 222, 236.
Cushing v. Smith, 198.
Cushman v. Bailey, 14.

D.

Daby v. Ericsson, 129, 284.
Dake v. Butler, 32.

310

TABLE OF CASES.

K.-feivnet's

Dale v. Hamilton, 86, 92.

v. Pierce, 31.
Dalton City Co. v. Dalton Mfg.
Co., 14, 16.

v. Hawes, 14, 16.
Daniel v. Crowell, 228, 233.

v. Daniel, 247.

v. Ownes, 139.
Darby v. Darby, 126, 133, 141.

v. Gilligan, 223, 225, 226.
Darrow v. Calkins, 141, 142, 143,

144, 145, 146.
Dart v. Laimbeer, 255.
David v. Ellice, 220.
Davies v. Atkinson, 178.

v. Games, 123.

v. Harvey, 202.
Davis, Ex parte, 52.
Davis v. Berger, 191.

v. Church, 284.

v.Davis, 22, 121, 123, 127.

v. Dodson, 187.

v. Gelhaus, 95.

v. Howell, 234, 235.

v. Hubbard, 240.

v. Poland, 277.

v. Smith, 146.

v. White, 138.
Davis' Estate, 279.
Dawson v. Parsons, 121.
Dawson, Blackmore & Co. v.

Elrod, 194.
Day v. Lockwood, 167.

v. Stevens, 30, 35, 41, 44, 66.
Deal v. Bogue, 138, 139.
Dean v. Dean, 114.

v. Macdowell, 157, 158.
Dear, Ex parte, 235.
Deardorf s Adm'r v. Thacher, 78,

183, 190.
De Berenger v. Hamel, 273.
De Berkom v. Smith, 66, 67.
Decker v. Howell, 11.
De Cordova v. Powter, 30.

are to pagea

Deitz v. Regnier, 78, 189.
Delhasse, Ex parte, 22.
Delise v. Palladino, 242.
Dell, In re, 239.

Delmonico v. Guillaume, 125, 132.
Denholm v. McKay, 286.
Denithorne v. Hook, 67, 71.
Densmore v. Mathews, 49.
Densmore Oil Co. v. Densmore,

153.
Denver v. Roane, 163, 164, 281.
Desha v. Holland, 242.
De Tastet v. Shaw, 98.
Devaynes v. Noble, 204.
DeWit v. Lander, 242.
Dexter v. Dexter, 261, 282.
Dial v. Neuffer, 89.
Dickinson v. Dickinson, 89, 214.

v. Valpy, 72, 189, 248.
Dickson v. Cass, 275.
Digby, Ex parte, 14.
Digg's Adm'r v. Brown, 177.
Dilworth v. Mayfield, 176.
Dimon v. Hazard, 226.
Dimond v. Henderson, 168.
Divine v. Mitchum, 176.
Dob v. Halsey, 206, 242, 247.
Doggett v. Dill, 234, 287.

v. Jordan, 48.
Donaldson v. State Bank, 128.

v.Williams, 172, 188.
Donelson's Administrators v.

Posey, 176.
Doner v. Stauffer, 139, 231.
Donley v. Hall, 29.
Donally v. Ryan, 199.
Donnell v. Jones, 244.
Dore v. Wilkinson, 188.
Doty v. Patterson, 62.
Dougherty v. Van Nostrand, 110,

111, 279.
Dounce v. Parsons, 204.
Douthit v. Douthit, 254.
Dow v. Dempsey, 38.

TABLE OF CASES.

311

References are to pages.

Dow v. State Bank of Sleepy

Eye, 50, 52.
Downs v. Jackson, 159.
Doyle v. Bailey, 50, 51.

v. Burns, 11.
Drake v. Elwyn, 105, 197.
Dressel v. Lonsdale, 90.
Drew v. Ferson, 163.
Driver v. Burton, 244.
Dry v. Boswell, 41, 44.
Du Bree v. Albert, 132.
Duck v. Mayeu, 219.
Duff v. Maguire, 251.
Duffield v. Brainard, 261.
Duffy v. Gray, 244.
Dundas v. Gallagher, 279.
Dunham v. Loverock, 57.

v. Presby, 95.
Dunne v. English, 156.
Dunnell v. Henderson, 115.
Dupuy v. Leavenworth, 125.

v. Sheak, 89.
Durant v. Abendroth, 295, 296.

v. Pierson, 261, 283.

v. Rogers, 202.
Durborrow's Appeal, 128.
Duryea v. Burt, 10, 11, 176.

v. Whitcomb, 22.
Dutton v. Morrison, 140, 235.
Dwinel v. Stone, 25, 26, 35.
Dyer v. Clark, 121, 125, 126, 129,
130, 131, 143, 145, 228,
261.

v. Munday, 200.

v. Sutherland, 191.
Dyke v. Brewer, 210, 213.

E.

Eager v. Crawford, 30.

Eagle v. Bucher, 265.

Eagle Mfg. Co. v. Jennings, 220.

Eakin v. Shumaker, 155.

Earle v. Art Library Pub. Co.,

21, 28, 69, 136, 226.
Early v. Burt, 220.
Eastman v. Clark, 3, 15, 17, 19,
28, 30, 32, 41.

v. Cooper, 183.
Easton v. Strouther, 155.
Eastwood v. Bain, 250.
Eaton v. Walker, 61, 62.
Eckert v. Clark, 163.
Eddins v. Menefee, 162.
Edens v. Williams, 255.
Edgar v. Caldwell, 139.

v. Cook, 261.
Edgerton v. Preston, 107.
Edison Electric Illuminating Co.

v. DeMott, 229.
Edwards v. Dillon, 192, 198.

v. Dooley, 30.

v. Thomas, 261.

v.Tracy, 13, 16, 18, 31, 181,
184.
Egberts v. Wood, 261, 283.
Eich v. Sievers, 285.
Eichbaum v. Irons, 54.
Einstein v. Schnebly, 272.
Einstman v. Black, 202.
Elderkin v. Winne, 6.
Eldridge v. Troost, 77.
Eliot v. Himrod, 63, 290, 298.
Elliot v. Stevens, 237.
Elliott v. Holbrook, 219.
Ellis v. Schmaeck, 68.
Ellis' Adm'r v. Bronson, 212, 215.
Ellison v. Sexton, 217.

v.Stuart, 27, 29, 31, 48, 70,
84, 85, 181, 187, 188, 208,
209.
Ellsworth v. Pomeroy, 29.
Elmira Iron & Steel Rolling Mill
Co. v. Harris, 80, ISO, 215, 216.
Emanuel v. Bird, 234, 236.
Emerson v. Durand, 164, 165.

v. Senter, 283.

312

TABLE OF CASES.

References are to pages.

Emery v. Parrott, 156.

v.Wilson, 255.
Emly v. Lye, 199.
England v. Curling, 150, 257, 258,

259.
Englar v. Offutt, 204.
Englis v. Furniss, 251, 253.
Enix v. Hays, 242.
Ernest v. Nicholls, 16.

v. Woodworth, 139.
Erwin's Appeal, 126.
Eshleman v. Harnish, 32.
Esmond v. Seeley, 153.
Esposito v. Bowden, 263.
Essex v. Essex, 141, 151.
Estabrook v. Messersmith, 245,

246.
Estate of Winters, 5.
Estes, In re, 234.
Eustis v. Bolles, 214, 262.
Evans v. Evans, 280.

v. Hanson, 113, 149.

v. Hawley, 176.

v.Warner, 136, 163.

v. Watts, 282.
Everett v. Coe, 41, 43.
Everhart's Appeal, 86.
Everit v. Watts, 89.
Everitt v. Chapman, 41, 43, 48,

209.
Ewing v. Osbaldiston, 177.
Exchange Bank v. Gardner, 170.

v. Tracy, 261.
Eyre, Ex parte, 203.

F.

Fairbank v. Leary, 94.

Fairchild v. Fairchild, 86, 119,
120, 141, 143, 145.

Faith v. Richmond, 197.

Fall River Whaling Co. v. Bor-
den, 145.

Faneuil Hall Nat. Bank v. Me-
loon, 219.

Fanning v. Chadwick, 252.
Farley v. Lovell, 245, 246, 247.
Farmer v. Bank of Wickliffe, 186.

v. Putnam, 256.
Farmers' Bank v. Bayliss, 106.
Farmers' Ins. Co. v. Ross, 48, 56.
Farnsworth, v. Boardman, 297.
Farr v. Johnson, 136.
Farrar v. Deflinne, 215.
Farrell v. Friedlander, 202.
Farwell v. St. Paul Trust Co.,
178.

v. Tyler, 252.
Faulds v. Yates, 125, 146, 172.
Faulkner v. Brigel, 243.
Fawcett v. Osborn, 94.
Fay v. Burditt, 88.

v. Noble, 62.

v. Waldron, 8, 84.
Fayette Nat. Bank v. Kennedy's

Assignee, 236.
Fear, In re, 226.
Featherstonhaugh v. Fenwick,

133, 134, 135, 265.
Fechteler v. Palm Bros. & Co.,

37, 91.
Fellows v. Wyman, 276.
Felt v. Cleghorn, 138, 140.
Felton v. Deall, 32.
Fennell v. Myers, 289.
Fereday v. Hordern, 39, 41.

v. Wightwick, 123.
Ferguson v. Baker, 251.
Fergusson v. Fyffe, 182.
Ferrero v. Buhlmeyer, 269.
Ferris v. Thaw, 63, 103.
Ferson v. Monroe, 231.
Fettretch v. Armstrong, 275.
Fewell v. American Surety Co.,

140.
Fifth Ave. Bank v. Colgate, 299.
Filburn v. Ivers, 154, 155.
Filley v. Phelps, 131.
Firemen's Ins. Co. v. Floss, 249.

TABLE OF CASES.

313

References

First Nat. Bank v. Almy, 62.

v. Rowley, 187.

v. Strait, 264.

v.Whitney, 297.

v.Wood, 255.
Fish v. Thompson, 117.
Fisher v. Allen, 284.

v.Bowles, 66.

v. Syfers, 223, 224.
Fisk v. Fisk, 112.
Fitch v. Harrington, 12.
Fitzgerald v. Christl, 223, 226.

v. Grimmell, 100.
Fitzpatrick v. Flannagan, 231.
Flagg v. Stowe, 63, 122, 136.
Flanagan v. McAffee, 139.
Fleischmann v. Gottschalk, 135,

136.
Fleming v. Dorn, 68.
Flemyng v. Hector, 54.
Fletcher v. Ingram, 157, 249.

v. Pullen, 67, 68, 70, 71.

v. Reed, 265.
Flower v. Barnekoff, 47, 86, 94.
Folk v. Wilson, 106.
Folsom v. Marlette, 168.
Forbes v. Garfield, 277.

v. Webster, 159.
Fordyce v. Shriver, 170.
Forney v. Adams, 247.
Forrer v. Forrer's Ex'rs, 155.
Forrester v. Oliver, 282.
Forster v. Hale, 86.

v. Mackreth, 187.
Forsyth v. Woods, 95, 232.
Foster v. Barnes, 230.

v. Field, 228.

v. Sargent, 121.
Foster's Appeal, 143.
Fountain v. Hutchinson, 131.
Fourth Nat. Bank v. Altheimer,

37, 38.
Fourth St. Nat. Bank v. Whit-
aker, 299.

are to pages.

i Fox v. Clifton, 8.

v. Curtis, 182.

v. Hanbury, 275.
Franklin Sugar Refining Co. v.

Henderson, 225.
Frazer v. Linton, 136.
Freeman v. Abramson, 188.

v. Bloomfield, 4, 5, 67.

v. Hemenway, 269.

v. Stewart, 176.
French v. Styrnig, 43, 56, 57.
French Spiral Spring Co. v. New-
England Car Trust, 292.
Frey v. Eisenhart, 282.
Friend v. Duryee, 78, 189.
Fromont v. Coupland, 46.
Frost v. Walker, 291.
Frow's Estate, 230.
Fuller v. Ferguson, 76, 90.

v. Rowe, 62, 64.
Fuller & Fuller Co. v. McHenry,

90.
Fulmer's Appeal, 116.
Fulton v. Central Bank of Pitts-
. burg, 277.

a.

Gabriel v. Evill, 52, 210.

Gadsden v. Carson, 227.

Gage v. Parmalee, 150, 167, 169.

v. Rogers, 216.
Galbraith v. Gedge, 143, 145.

v.Tracy, 113, 284, 286.
Gallagher's Appeal, 227.
Gait's Ex'r v. Calland's Ex'r,

249.
Galway v. Nordinger, 248.
Ganson v. Lathrop, 229, 234.
Gardiner v. Childs, 46, 188.
Garnett v. Richardson, 63.
Garretson v. Brown, 277, 279.
Garrett v. Handley, 243.

v. Republican Pub. Co., 32.

3U

TABLE OF CASES.

Referenoea are to pages.

Gartside Coal Co. v. Maxwell, 63,

64.
Gasely v. Separatists' Soc. 76.
Gass v. New York, P. & B. R.

Co., 45.
Gaston v. Drake, 95.
Gates v. Beecher, 274.

v. Hughes, 197.

v. Watson, 250.
Gathright v. Burke, 216.
Gay, In re, 222.
Gay v. Seibold, 107, 109.

v. Waltman, 191.
Gearing v. Carroll, 295, 296.
Geddes v. Wallace, 92, 150.
Gedge v. Cromwell, 181.
George v. Carpenter, 297.
Gerard v. Bates, 139.

v. Gateau, 272, 273.
Getchell v. Foster, 35, 103, 108.
G. H. Haulenbech Advertising

Agency v. November, 183.
Gibb's Estate, in re, 3, 4, 18, 29,

30, 37, 62, 65, 298.
Gibbs v. Humphrey, 231.
Gibson v. Lupton, 56.

v. Stone, 44.

v. Warden, 191, 192.
Giddings v. Palmer, 177.
Gilbert v. Lichtenburg, 243.
Gilchrist v. Brande, 215.
Gill v. Ferris, 269.

v. First Nat. Bank, 201.

v. Kuhn, 15, 23, 25, 52.
Gillan v. Morrison, 160.
Gillaspy v. Peck, 228.
Gille v. Hunt, 104, 124.
Gillilan v. Sun Mut. Ins. Co., 191,

194, 275, 279.
Gillingham v. Beddow, 112.
Gilman v. Cunningham, 57.

v. Vaughan, 167.
Gilmore v. Ham, 277, 278.
Gilpin v. Enderbey, 39.

Gilruth v. Decell, 204, 205.
Givens v. Berry, 151, 269.
Gleason v. Chicago, M. & St. P,
R. Co., 156.
v. McKay, 290.
Glenn v. Arnold, 222.

v. Bergman, 63.
Glore v. Dawson, 37.
Goble v. Gale, 242.
Goddard v. Hodges, 5, 12.
Goddard-Peck Grocery Co. v. Mc-

Cune, 224, 226.
Godfrey v. White, 143, 163, 168.
Goell v. Morse, 56.
Goembel v. Arnett, 178.
Goertner v. Trustees of Canajo-

harie, 274, 275.
Goesele v. Bimeler, 76.
Goldsmith v. Eichold, 153.
Goldthwait v. Janney, 126.
Goodburn v. Stevens, 143, 145.
Goodman v. Whitcomb, 272.
Goodnow v. Empire Lumber Co.,

88.
Goodson v. Goodson, 281.
Goodspead v. South Bend Chilled

Plow Co., 212, 276.
Gordon v. Albert, 275.
v. Bankard, 104.
v. Boppe, 255.
v. Freeman, 262.
v. Funkhouser, 198.
Gordon's Estate, 230.
Gorman v. Davis & Gregory Co.,
215.
v. Russell, 175.
Gossett v. Kent, 124.
Gottschalk v. Smith, 94.
Gough v. Davies, 220.
Gould v. Banks, 264.
Gow v. Hinton, 138.
Gowan v. Tunno, 288.
Grace v. Smith, 13, 14, 15, 17, 18,
27, 31.

TABLE OF CASES.

315-

References

Graham v. Holt, 251.

v. Hope, 216.

v. Meyer, 201.
Grant v. Hardy, 156.

v. Shurter, 284.
Graser v. Stellwagen, 188.
Graves v. Kellenberger, 189.
Gray v. Chiswell, 235, 287.

v.Gibson, 7, 21, 51.

v. Green, 274.

v. Palmer, 76, 125, 126, 143,
145, 280.

v.Ward, 190.
Gray's Estate, in re, 236, 288.
Great Western R. Co. v. Preston

& B. R. Co., 32.
Greatrex v. Greatrex, 168.
Greeley v. Wyeth, 245, 246.
Greene v. Butterworth, 234.

v.Graham, 131, 134.
Greenslade v. Dov/er, 189.
Gregg v. Hord, 150.
Gresham v. Harcourt, 286.
Griffith v. Buck, 225.
Griggs v. Clark, 136.
Grinton v. Strong, 35.
Griswold v. Haven, 182.

v. Waddington, 193, 214, 261.
263, 271, 288.
Groenendyke v. Coffen, 258.
Grollman v. Lipsitz, 105.
Grotte v. Weil, 221.
Grover v. Smith, 247.
Groves v. Wilson, 296.
Grund v. Van Vleck, 202.
Guckert v. Hacke, 63.
Guidon v. Robson, 242.
Guild v. Belcher, 210.
Guillou v. Peterson, 203, 204.
Gulf City Shingling Co., v. Boy-

les, 28.
Gulick v. Gulick, 91.
Gumbel v. Abrams, 208.
Gunn v. Black. 279.

are to pages.

Gunn v. Central R. R. 90.
Gunnison v. Erie Dime Sav. &

Loan Co., 127.
Gurr v. Martin, 44.
Gwens v. Berry, 170.
Gwynn v. Duffield, 202.
Gyger's Appeal, 165.

H.

Habicht v. Pemberton, 291.
Hackett v. Stanley, 13, 14, 18r

30, 31, 40, 47.
Hackley v. Patrick, 276, 278.
Haddock v. Crocheron, 278.

v. Grinnell Mfg. Crop., 298.
Haeberly, Appeal of, 143, 265.
Hagar v. Stone, 250.
Hage v. Campbell, 224.
Haggerty v. Foster, 296.

v. Taylor, 299.
Haggett v. Hurley, 90.
Haine's Estate, In re, 100.
Hair Co., James T. v. Thome,.

243.
Hale v. Wilson, 254.
Haley v. Case, 201.
Hall v. Clagett, 168.

v. Cook, 207.

v. Edson, 50.

v.Kimball, 253.

v. Lanning, 192.

v. Sannoner, 148.

v. White, 74.
Hallack v. March, 191.
Hallett v. Cumston, 112.
Hallett's Estate, In re, 219.
Halsey v. Norton, 262.
Hamilton, In re, 91, 238.

v.Smith, 60.
Hammond, Ex parte, 222.

v. Douglass, 111.
Hamper, Ex parte, 13, 15, 22.
Hamsmith v. Epsy, 208.

316

TABLE OF CASES.

References are to pages.

Hanchett v. Gardner, 188.
Hamlin v. Davis, 50.
Haney Mfg. Co. v. Perkins, 201.
Hannaman v. Knrrick, 267.
Hanover Nat. Bank v. Klein,

224.
Hapgood v. Cornwall, 176, 178,

230, 233.
Hardin v. Dolge, 126.
Harding, Ex parte, 206.
Hargadine v. Gibbons, 281, 285.
Hargadine-McKittrick Dry Goods

Co. v. Belt, 223, 224, 229.
Harlow v. La Brum, 153.
Harman v. Johnson, 203.
Harmon v. Clark, 237.
Harris v. Carter, 136.

v. Crary, 81.

V.Harris, 125, 143, 255.

v. Phillips, 137.

v. Visscher, 97.
Harris County v. Donaldson,

190.
Harrison v. Bevington, 214.

v. Heathorn, 290.

v. Jackson, 191, 198.

v. McCormack, 241.

v. Tennant, 272, 273.
Hart v. Bowen, 284.

v. Hart, 122.

v. Kelley, 32.

v. Woodruff, 276.
Hartman v. Woehr, 51, 166, 167,

267.
Hartnett v. Stillwell, 131.
Hartney v. Gosling, 10, 11.
Harvey v. Childs, 19, 20, 27.

v. Varney, 95.
Hasbrouck v. Childs, 116, 117.
Haskell v. Adams, 251.
Haskins v. Burr, 51.

v. D'Este, 99, 102, 103.
Hastings Nat. Bank v. Hibbard,
198.

Hatch v. Wood, 242, 249.
Haulenbeck Advertising Agency,

G. H. v. November, 183.
Haven v. Wakefield, 253.
Havens v. Hussey, 262.
Hawk Eye Woolen Mills v. Conk-

lin, 223, 230.
Hawkins v. Lasley, 241.
Hawley v. Campbell, 222.

v. Dixon, 32.
Hawtayne v. Bourne, 184, 199
Hayden, Ex parte, 237.
Hayes v. Heyer, 278, 297.

v. Vogel, 47.
Haynes v. Carter, 216.
Hayward v. Barron, 21, 25, 30,

84.
Hazard v. Hazard, 22.
Hazelton Boiler Co. v. Hazelton

Tripod Boiler Co., 109.
Heap v. Dobson, 210.
Heath v. Percival, 221.
v. Sansom, 215, 269.
v. Waters, 163, 286.
Heartt v. Walsh, 187, 274.
Heckard v. Fay, 163.
Heckert v. Fegely, 210.
Hedge's Appeal, 4, 11, 50, CO,

290, 291.
Hedley v. Bainbridge, 78, 189.
Hefferlin v. Karlman, 186.
Hefner v. Palmer, 71.
Heimstreet v. Howland, 32, 41,

44.
Heineman v. Hart, 225.
Helme v. Smith, 57.
Hemenway v. Burnham, 251.
Henderson v. Kissam, 284.
Hendren v. Wing. 124.
Hendrick v. Gunn, 45.
Hendry v. Turner, 213.
Hendy v. March, 35, 58.
Henkel v. Heyman, 295.
Henn v. Walsh, 272.

TABLE OF CASES.

31T

References

Henrickson v. Reinbach, 136.
Henry v. Anderson, 100, 132.

v. Bassett, 136.

v. Jackson, 54, 150.
Hershfield v. Claflin, 138, HO.
Hess v. Lowrey, 201.

v. Werts, 291.
Hey v. Harding, 255.
Heydon v. Heydon, 138.
Heyhoe v. Burge, 13, 41.
Hichens v. Congreve, 153.
Hicks & Co. v. Cram, 72.
Hier v. Kaufman, 192.
Higgins v. Armstrong, 10.
Hill v. Beach, 63, 176, 239.

v. Cornwall & Bro.'s Assig-
nee, 145.

v. Draper, 129.

v. King, 166.

v. Miller, 154.

v. Palmer, 255.

v. Stetler, 298.
Hilliker v. Loop, 242.
Hillock v. Traders' Ins. Co.,

187.
Hills v. M'Rae, 287.
Hilton v. Vanderbilt, 274, 27S.
Hinds, Ex parte, 121.
Hinman v. Littell, 67.
Hinton v. Law, 58.

v. Odenheimer, 217.
Hiscock v. Phelps, 113, 126, 177.
Hitchings v. Ellis, 25.
Hite Natural Gas Co.'s Appeal,

298.
Hoadley v. County Commission-
ers, 101, 290.
Hoagland's Estate, In re, 52.
Hoaglin v. Henderson, 90, 137.
Hoard v. Clum, 261.
Hoare v. Dawes, 56.

v. Oriental Bank, 97, 224.
Hobart v. Ballard, 51.

v. Lemon, 89.

are to pages.

Hobbs v. Chicago Packing &
Provision Co., 200.

v. McLean, 95, 177.
Hodge v. Twitchell, 156.
Hodgson, In re, 287.
Hodgson v. Baldwin, 54.
Hoeflinger v. Wells, 196.
Hoffer's Appeal, 229.
Hoffman v. Porter, 125.
Hogan v. Hadzsits, 299.

v. Reynolds, 217.
Hogendobler v. Lyon, 274.
Hoile v. York, 51.
Holbrook v. Lackey, 129, 130,
284.

v. Oberne, 29, 39.

v. St. Paul F. & M. Inii. Co.,
107.
Holden v. French, 29, 44.

v. McMakin, 110.
Holderness v. Shackels, 178.
Holifield v. White, 32, 41, 44.
Holladay v. Elliott, 272.
Holland v. Long, 67, 105.
Holliday v. Union & Pager Bag

Co., 296.
Hollister v. Simonson, 271.
Holme v. Hammond, 19, 20, 184.
Holmes v. DeCamp, 284.

v. Hawes, 226.

v. Jarrett, 124, 125.

v. McDowell, 228.

v. McGray, 94.

v. Old Colony R. Co., 30, 32.
Holt v. Simmons, 263.
Holton v. Holton, 227.
Home v. Hammond, 17.
Home Library Ass'n v. White-
row, 249.
Homer v. Wood, 245, 246.
Homfray v. Fothergill, 135.
Hooper v. Keay, 218.
Hopkins v. Banks, 276.

v. Forsyth, 57.

318

TABLE OF CASES.

References

Horbach's Adm'rs. v. Eider, 162.
Horn v. Newton City Bank, 199.
Horton's Appeal, 8, 269.
Hoskinson v. Eliot, 78, 180, 181,

183, 184, 191, 284.
Hotchin v. Kent, 184.
Hotopp v. Huber, 296.
Houseal's Appeal, 230.
Howe v. Lawrence, 226, 23G.

v. Savory, 242.

v. Shaw, 207.
Howell v. Adams, 197, 214, 215,
216.

v. Brodie, 52.

v.Harvey, 265, 267, 271.
Howes v. Fisk, 73.
Howland v. Davis, 181.
Hoyt v. Hasse, 210.

v. Sprague, 177, 258.
Hubbard v. Curtis, 138.

v. Guild, 175.

v. Matthews, 51, 53, 274.

v. Moore, 273.

v. Morgan, 296.
Hubbardston Lumber Co. v. Cov-
ert, 101, 128.
Hudson v. McKenzie, 188.
Huggins v. Huggins, 22.
Hughes v. Ewing, 168.

v. Gross, 210.
Huiskamp v. Moline Wagon Co.,

224.
Hulett v. Fairbanks, 47, 93, 94.
Hultzer v. Phillips, 236.
Humphreys v. McKissock, 39

v. Mooney, 62.
Hundley v. Farris, 234.
Hunnewell v. Willow Springs

Canning Co., 291.
Hunt v. McCabe, 30.

v. Semonin, 105.
Hunter v. Conrad, 31.

v. Hunter, 219.

v. Pfeiffer, 96.

are to pages.

Hunter v. Whitehead, 87, 94.
Huntington v. Potter, 274, 275.
Huntington-White Lime Co. v.

Mock, 276.
Huntley v. Huntley, 85, 86.
Hurlbut v. Johnson, 137.
Hurley v. Walton, 93, 94.
Hutchinson v. Dubois, 128, 131,
136, 138, 139.
v. Smith, 283.
Hutton v. Eyre, 219.
v. Murphy, 249.
v. Thompson, 60.
Hyde v. Casey-Grimshaw Marble
Co., 206, 207.
v. Moxie Nerve-Food Co.,
242.
Hyrne v. Erwin, 201, 249.

Iddings v. Pierson, 104.
Ihmsen v. Lathrop, 67.
Iliff v. Brazill, 56.
Illingworth v. Parker, 38.
Illinnois Cent. R. Co. v. Owens,

243.
Ingals v. Ferguson, 4, 5.
Ingraham v. Foster, 52.
Insurance Co. v. Railroad Co., 45.
Irvin v. Conklin, 71.

v.Nashville, C. & St. L. R.
Co., 45, 46.
Irwin v. Bidwell, 32, 52.

v. Williar, 183, 184, 188.
Island Sav. Bank v. Galvin, 288.
Isler v. Baker, 271.
Ives v. Miller, 251, 252.

Jacaud v. French, 97, 245.
Jack v. McLanahan, 277, 279.

TABLE OF CASES.

310

References

Jackson, Ex parte, 211.

v. Bohrman, 243.

v. Cornell, 227.

v. Crapp, 117.

v. Deese, 271.

v. Jackson, 123.

v. Johnson, 167.

v. Lahee, 228.

v. McLean's Ex'rs, 95.

v. Pixley, 74.
Jackson Bank v. Durfey, 225.
Jacomb v. Harwood, 220.
Jacquin v. Buisson, 280, 294, 298.
Jaffe v. Krum, 297.
Jaffrey v. Jennings, 208.
James, In re, 167.

v. Burnett, 137.
James T. Hair Co. v. Thorne,

243.
Janney v. Springer, 178, 188.
Jeffereys v. Small, 130.
Jeness v. Carlton, 261.
Jennings v. Baddeley, 272.

v. Rickard, 158.
Jernee v. Simonson, 19, 21, 31,

48.
Jessup v. Carnegie, 63.
Jewett, In re, 67.

v. Brooks, 255.
Johnson's Appeal, 155.
Johnson v. Alexander, 18.

v. Berlizheimer, 284.

v. Bernheim, 194.

v. Carter, 29, 36, 38, 84, 102.

v. Connecticut Bank, 137.

v. Crichton, 247.

v. Hartshorne, 165, 166.

v. Miller, 32.

v. Peck, 245.

v. Smith, 240.
John Spry Lumber Co. v. Chap-
pell, 230.
Johnston v. Dutton's Adm'r, 172.
194.

are to pages.

Johnston v. Eichelberger, 51.

v. Robuck, 224.
Jones' Appeal, 132.
Jones v. Blun, 97, 100.

v. Butler, 117.

v.Clark, 10, 290.

v. Davies, 24, 27, 56, 84, 86,
93, 125, 146, 210.

v. Davis, 211.

v. Dexter, 129.

v. Fegely, 80.

v. Howard, 45.

v. Jones, 264.

v.Lloyd, 271.

v. McMichael, 41, 43, 47, 85.

v. Maund, 218.

v. Murphy, 38.

v. Neale, 125.

v. Noy, 271.

v. O'Farrel, 8, 9.

v. Parker, 91.

v. Scott, 8.

v. Walker, 30, 31, 282.

v.Yates, 245, 246.
Jordan, In re, 207.

v. Miller, 192.
Judd Oil Co. v. Hubbell, 208.
Judge v. Braswell, 10, 190.
Jurgens v. Ittman, 271.

K.

Kahn v. Smelting Co., 10.

v. Thomson, 107.
Kaiser v. Lawrence Sav. Bank,

63.
Karrick v. Hannaman, 267.
Katz v. Brewington, 151.
Keay v. Fenwick, 222.
Keiley v. Turner, 164, 165, 168.
Reiser v. State, 32.
Kell v. Nainby, 242.
Keiley v. Bourne, 124.
v. Hurlburt, 215.

320

TABLE OF CASES.

References

Kelley v. Shay, 134, 165.
Kellogg v. Griswold, 15.
Kellogg Newspaper Co., A. N. v.

Farrell, 21.
Kelly v. Devlin, 95.

v. Scott, 231.
Kelly Co., O. S. v. Zarecor, 141.
Kemptner, In re, 226.
Kendal, Ex parte, 233.
Kendal v. Wood, 185.
Kendall, Ex parte, 239.
Kendall v. Hamilton, 206, 221,

287.
Kennedy v. Budd, 108, 109.

v. Kennedy, 174.

v. McFadon, 162.
Kenneweg v. Schilansky, 128.

131.
Kerr v, Potter, 22, 23, 25, 29.
Kershaw v. Kelsey, 87.
Ketchem v. Durkee, 177.
Ketchum v. Clark, 263.

v. Durkee, 226, 231.
Kilgore v. Bruce, 247.
Kimball v. Lincoln, 163.
Kimberley v. Arms, 10, 11, 154.
Kimmins v. Wilson, 92.
King, Ex parte, 239.
King's Appeal, 228.
King v. Chuck, 151.

v. Hamilton, 163.

v. Hoare, 221.

v. Sarria, 294.
Kingman v. Spurr, 6, 8, 52, 291.
Kingsbury v. Tharp, 48.
Kingsland v. Braistead, 291.
Kinloch v. Hamlin, 267.
Kinney v. Robison, 254.
Kinsman v. Castleman, 105.

v. Parkhurst, 155.
Kirby v. Carpenter, 229, 234.

v. Carr, 271.

v.Hewitt, 104.
Kirk v. Blurton, 107.

are to pages.

Kirk v. Garrett, 202.

v. Hartman, 66, 71.

v. Hodgson, 173.
Kirkman v. Kirkman, 112.
Kirkwood v. Cheetham, 66.
Kirwan v. Kirwan, 220.
Kitner v. Whitlock, 102, 104.
Kline v. Swift Specific Co., 241.
Knipe v. Livingston, 169, 170.
Knowlton v. Reed, 44, 256.
Knox v. Buffington, 193.

v. Gye, 129, 131, 135.
Kramer v. Arthurs, 128.
Krans v. Luthy, 73.
Kringle v. Rohmberg, 125.
Kritzer v. Sweet, 67, 71.
Kruschke v. Stefan, 121, 128,

132.
Kucaid v. National Wall Paper

Co., 224.
Kuhn v. Newman, 35, 47.
Kutz v. Dreibelbis, 252.

v. Naugle, 275.

Lacey v. Hill, 181, 219, 236, 23S..
Lachaise v. Marks, 295, 296.
Lacy v. Wolcott, 276.
Ladd v. Griswold, 178, 225.
Laffan v. Naglee, 155.
LaFlex v. Burss, 30.
Lafond v. Deems, 54, 291.
Lake v. Duke of Argyll, 70.

v. Gibson, 130.

v. Munford, 291.
Lamb v. Wilson, 163, 279.
La Mont v. Fullam, 32.
Lampert v. Ravid, 254, 255.
Lamwersick v. Boehmer, 104.
Lancaster Bank v. Myley, 235.
Lancaster Co. Nat. Bank v. Bof-

fenmyer, 66.
Lane v. Arnold, 109.

TABLE OF CASES.

321

References are to pages.

Lane v. Bishop, 90.

v. Jones, 176.

v. Thomas, 95.

v.Williams, 190.
Lange v. Kennedy, 274.
Langmead's Estate, In re, 177,

178.
Lanier v. McCabe, 189.
Lansing v. Gaine, 276.
Lapenta v. Lettieri, 273, 274.
Lathrop v. Adams, 200, 201.
Latta v. Kilbourn, 50, 154, 156,

157, 158, 172.
Lanferty v. Wheeler, 107.
Lauffer v. Cavett, 12/.
Lawrence v. Clark, 162, 252.

v. Hull, 108.

v. Robinson, 11, 165.

v. Taylor, 191.
Laws v. Rand, 187.
Lay v. Emery, 152.
Laylin v. Knox, 221.
Leach v. Leach, 155.

v. Milburn Wagon Co., 241.
Leadbitter v. Farrow, 249.
Leaf's Appeal, 145.
Leavitt v. Peck, 184, 193, 194.
Lee v. First Nat. Bank, 7S, 189,
190.

v. Lashbrooke, 136.
Lee's Ex'x. v. Dolan's Adm'x,

160.
Lefevre's Appeal, 86, 119, 121,

226, 231, 232.
Le Fevre v. Castagnio, 26, 27, 29.
Leggett v. Hyde, 13, 14, 17, 18,

22, 30, 31, 40.
Leinkauff v. Munter, 208.
Lengle v. Smith, 37, 38.
Lenow v. Fones, 145.
Leonard v. Sparks, 35.
LePage v. McCrea, 217, 219, 248.
LeRoy v. Johnson, 197.
Leslie v. Wiley, 250.

Lester v. Givens, 137-140.
Leverson v. Lane, 185.
Levy v. Cadet, 277.

v. Pyne, 189.

v. Williams, 225.
Lewis v. Cline, 240.

v. Greider, 242.

v. Moffett, 163, 164.

v. Reilly, 189.
• v. Tilton, 291.
Liberty Sav. Bank v. Campbell,

247.
Ligare v. Peacock, 136, 163, 166,
167, 264.

v. Vanderburg, 265.
Lindner v. Adams County Bank,

282.
Lindsay v. Race, 119.
Lineweaver v. Slagle 296, 29S.
Lingen v. Simpson, 178.
Lingenfelser v. Simon, 222.
Lintner v. Millikin, 21, 24, 31,

48.
Linton v. Hurley, 207.
Little v. Caldwell, 281, 286.
Liverpool, B. & R. P. Nav. Co. v.

Agar, 97.
Livingston v. Lynch, 25, 173.

v. Roosevelt, 185, 189.
Lloyd, In re, 237.
Lloyd v. Archbowle, 242.

v. Carrier, 168.

v. Loaring, 54.

v. Thomas, 279.

v. Tracy, 138.
Locke v. Lewis, 196.

v. Stearns, 201.
Lockwood v. Beckwith, 152, 157.

v. Doane, 37, 38, 47.

v. Roberts, 166.
Lodd v. Griswold, 236.
Lodge, Ex parte, 238.

v. Dicas, 220.

v. Prichard, 235.

322

TABLE OF CASES.

References are to pages.

Loeb v. Morton, 108.

v. Pierpoint, 192.

v. Stern, 182.
Loeschigk v. Hatfield, 283.
Logan v. Mason, 218.
Lomme v. Kintzing, 14.
London Assur. Co. v. Drennan,

23.
Long v. Majestre, 157.

v. Slade, 235.
Loomis v. Armstrong, 280, 285.

v. Barker, 208.

v. Marshall, 29, 31.
Loorya v. Kupperman, 265.
Lord v. Baldwin, 237.

v. Devendorf, 234.

v. Proctor, 13, 18.
Lord Southampton v. Brown,

198.
Louisville Trust Co. v. Columbia

Finance & Trust Co., 121.
Louisville & N. R. Co. v. Alex-
ander, 90.
Love v. Payne, 7, 8, 9.
Lovejoy v. Spafford, 217.
Lowrey v. Brooks, 44.
Lowman v. Sheets, 186.
Lucas v. Laws, 139.
Ludlow's Heirs, v. Cooper's De-
visees, 131, 134, 143, 145, 146.
Lunt v. Lunt, 109.
Lusk v. Smith, 276.
Lyman v. Lyman, 76, 133.
Lyon v. Johnson, 214.

v. Knowles, 44.

v. Snyder, 163.
Lyons v. Lyons, 160.

v. Murray, 159.
Lyth v. Ault, 220, 221.

M.

Mabett v. White, 194.
McAdams' Ex'rs v. Hawes, 87.

McAllister v. Payne, 164.
McArthur v. Bloom, 89.

v. Ladd, 30.
McBride v. Ricketts, 39.
McCabe v. Sinclair, 85.
McCall v. Moschcowitz, 111.

v. Moss, 8, 151, 269.
McCartney v. Hubbell, 284.
McCaughan v. Brown, 281, 283.
McConnell v. Denver, 10.
McCoon v. Galbraith, 279.
McCormack's Appeal, 132.
McCowin v. Cubbison, 276, 279.
McCoy v. Brennan, 244.
McCulloh v. Dashiell's Adm'r,

237.
McDonald v. Fairbanks, 1SS.

v. Matney, 25, 49.
McDonnell v. Battle House Co.,
32.

v. Ford, 242, 243.
McDowell v. North, 252.
McDuffie v. Bartlett, 49.
McElvey v. Lewis, 265.
McFadden v. Leeka, 160.
McGehee v. Powell, 298.
McGlensey v. Cox, 8, 9.
McGorray v. O'Connor, 280.
McGowan Bros. Pump & Mach.

Co. v. McGowan, 112.
McGrath v. Cowen, 194, 282.

v. Home Ins. Co., 187.
McGreary v. Chandler, 291.
McGregorv. Cleveland, 102, 105.
McGrew v. City Produce Exch.,
61.

v. Walker, 49.
McGunn v. Hanlin, 94, 96.
Mcintosh v. Zaring, 281.
Mclntyre v. Miller, 217.
Mackay v. Bloodgood, 191.
McKelvy's Appeal, 262.
McKewan's Case, 161.
Mackey v. Bloodgood, 199.

TABLE OF CASES.

323

References are to pages.

Macklin's Ex'r v. Crutcher, 105,

106, 108.
McKnight v. Ratcliff, 297.
McLain v. Carson, 288.
McLaughlin v. Bieber, 221.
McLeod v. Miner, 52.
McLinden v. Wentworthh, 104.
McMahon v. McClernan, 157,

265.
McMillan v. Hadley, 126.
McNair v. Rewey. 197.
McNeely v. Haynes, 200.
McNeil v. First Congregational

Soc, 126.
McNutt v. King, 261.
McPherson v. Bristol, 188.

v. Rathbone, 276.
McPhillips v. Fitzgerald, 36.
McStea v. Matthews, 51.
Macy v. DeWolf, 57.
Maddick v. Marshall, 68, 69.
Maddock v. Astbury, 145.
Madison County Bank v. Gould,

295.
Mafflyn v. Hathaway, 225.
Magovern v. Robertson, 40, 47.
Mair v. Glennie, 41.
Major v. Hawkes, 187, 274.

v.Todd, 163.
Malley v. Atlantic F. & M. Ins.

Co., 113.
Mallory v. Hanaur Oil-Works,

91.
Maloney v. Bruce, 298.
Maltz v. American Exp. Co., 292.
Mangels v. Shaen, 253.
Manhattan Brass Co. v. Allin,

297.
Manhattan Brass & Mfg. Co. v.

Sears, 14, 22, 35, 38, 101.
Manhattan Co. v. Laimbeer,
293, 295, 298.
v.Phillips, 295, 296.
Mann v. Butler, 148, 150, 291.

Mann v. Taylor, 44.
Manning v. Gasharie, 291.

v. Williams, 288.
Manufacturers' & Mechanics'

Bank v. Winship, 107.
Mara v. Browne, 204.
Markle v. Wilbur, 173.
Marks v. Hastings, 202.
Marlett v. Jackman, 69.
Marquand v. New York Mfg. Co.,

5, 116, 262, 269.
Marsh's Appeal, 164, 170.
Marsh v. Davis, 84, 86, 87.

v. Joseph, 200, 201.
Marshall v. Johnson, 157.

v. Lambeth, 299.
Martin v. Baird, 52.

v. Crump, 129, 130.

v. Fewell, 63.

v. Morris, 143.

v. Stubbings, 251.
Martyn v. Gray, 69.
Marvin v. Wilber, 206.
Mason v. Connell, 7, 8, 9, 267.

v. Denison, 248.

v. Eldred, 206.

v. Hackett, 30.

v. Partridge, 194.

v. Potter, 41.

v. Tiffany, 281, 287.
Masters v. Lauder, 297.
Matherson v. Wilkinson, 281.
Matlock v. Matlock, 143.
Matteson v. Nathanson, 212, 284.
Matthews v. Adams, 117, 160.
168.

v. McStea, 263.
Matthies v. Herth, 198.
Mattingly v. Stone's Adm'r, 164.
Mattison v. Farnham, 261.
Mattlack v. James, 126.
Mauck v. Mauck, 132, 146.
Maude, Ex parte, 239.
Maugham v. Sharpe, 107, 125.

324

TABLE OF CASES.

References are to pages.

Mauney v. Colt, 30, 278.

.Maxwell v. Gibbs, 74, 215.

May v. International Loan &

Trust Co., 33, 48.
Mayer v. Clark, 225.

v. Soyster, 90.
.Mayiield v. Turner, 29.
Mayhew's Case, 8.
.Mayou, Ex parte, 220.
May rant v. Marston, 39.
Mead v. Shepard, 188.
v. Tomlinson, 243.
Meador v. Hughes, 91.
Meadows v. Moquot, 161.
Meagher v. Reed, 50.
Meaher v. Cox, 7, 8, 9.
Meason v. Kaine, 121, 252, 258.
Mechanics' & Farmers' Bank v.

Dakin, 108.
Medbury v. Watson, 244.
Medill v. Collier, 63.
Meech v. Allen, 228, 234.
Meehan v. Valentine, 3, 20, 27,

31, 37, 47, 100.
Mehlhop v. Rae, 88.
Meily v. Wood, 100.
Mellersh v, Keen, 110.
Mellors v. Shaw, 200.
Menage v. Burke, 124.
Menagh v. Whitwell, 131, 176,

225.
Mendenhall, In re, 61.
Mendenhall v. Benbow, 177.
Menendez v, Holt, 110.
Menkins v. Lightner, 89.
Merchants' Nat. Bank v. Stand-
ard Wagon Co, 19.
v. Wehrmann, 91.
Merchants' & Manufacturers'

Band v. Stone, 62.
MeridanNat. Bank v. Gallaudet,

49, 102.
Merrall v. Dobbins, 13, 18.
Merrick v. Brainard, 8.

Merrick v. Cordon, 41, 45.
Merrill, In re, 298.

v. Blanchard, 213.
Merriman v. Magiveny, 62.
Merritt v. Day, 277.

v. Dickey, 129, 280.

v. Walsh, 58.
Mersereau v. Norton, 128.
Mershon v. Hobensack, 70.
Meserve v. Andrews, 160.
Messer v. Messer, 125.
Metcalf v. Redmon, 4, 6, 51.
Metcalfe v. Bradshaw, 151, 158.
Metropolitan Nat. Bank v. Sirret,

295, 296.
Meyer v. Krohn, 12, 91, 216.

v. Michaels, 198.

v. Sharpe, 46.
Meyers v. Merillion, 163.
Meyran v. Abel, 279.
Michael v. Workman, 103.
Mickle v. Peet, 252.
Mifflin v. Smith, 106, 151, 264.
Miles v. Ogden, 218.
Millar v. Craig, 167.
Miller v. Florer, 275.

v. Freeman, 255.

v. Hoffman, 281.

v. Hughes, 14, 30, 47.

v. Jones, 280.

v. Lord, 168.

v. O'Boyle, 155.

v. Royal Flint Glass Works,
180.
Milliken v. Loring, 275.
Milner v. Cooper, 283.
Miner v. Downer, 106, 198.

v. Lorman, 254.
Minnit v. Whinery, 212.
Minror v. Gaw, 247.
Mitchell v. Dall, 242.
Mitchell v. O'Neale, 92.

v. Ostrom, 276.

v. Railton, 240.

TABLE OF CASES.

325

References are to pages.

v. Reed, 155.

v. Tarbutt, 249.

v.Wells, 251, 255.
Moderwell v. Mullison, 143.
Moffat v. McKisick, 105.
Moies v. O'Neill, 271.
Moist's Adm'rs' Appeal, 282.
Moley v. Brine, 136.
Molineaux v. Raynolds, 133. 134.
Moline Water Power & Mfg Co.

v. Webster, 234.
Mollwo v. Court of Wards, 17,

21, 22, 37, 40, 54, 66.
Monroe v. Connor, 194, 212, 267.

v. Ezzel, 242.

v. Greenhoe, 35.
Montague v. Hayes, 166.
Montgomery v. Forbes, 63.
Moore, Ex parte, 239.
Moore v. Bare, 136.

v. Duckett, 213.

v. Knight, 204.

v. Pennell, 138, 139.

v. Price, 272.

v. Williams, 36.
Moran v. Palmer, 143.
More v. Rand, 254.
Moreau v. Saffarans, 124.
Moreton v. Hardern, 201.
Morgan v. Farrel, 48.

v. Stearns, 36.

v. Tarbell, 218.
Morlitzer v. Bernard, 199.
Morrill v. Bissell, 214.

v. Colebour, 146.

v. Spurr, 52.
Morris v. Barrett, 118, 123.

v. Peckham, 85, 86, 259.

v. Wood, 170.
Morris Run Coal Co. v. Barclay

Coal Co., 90, 95, 96.
Morrison v. Blodgett, 138, 140.

v.Cole, 30.

v. Smith, 170.

Morrow v. Murphy, 30.

Morse v. Richmond, 35, 36, 47,

106, 184, 197.
Morss v. Gleason, 268.
Mortley v. Flanagan, 226.
Mosier v. Parry, 60.
Moss v. Jerome, 45.

v. Livingston. 250.
Mudd v. Bates, 256.
Mulhall v. Cheatham, 22, 24, 47.
Mumford v. McKay, 269.

v. Nicholl, 47, 58.
Munson v. Sears, 39.
Munton v. Rutherford, 69.
Murphy v. Crafts, 170.

v.Warren, 115, 122, 177.
Murray v. Bogert, 7.

v. Mumford, 274, 281.
Murrell v. Murrell, 76.
Murrill v. Neill, 234, 235.
Musier v. Trumpbour, 43.
Mycock v. Beatson, 271.
Myers v. Edison Gen. Elec. Co.,
296.

v. Tyson ,226.

v.Winn, 252.
Myndersee v. Snook, 244.
Myrickv. Dame, 245.

X.

Nanson v. Gordon, 238.
Napier v. Catron, 192.

v. McLeod, 278.
National Bank v. Ingraham, 105,
108.
v. Norton, 276.
v. Thomas, 197, 199.
National Bank of Commerce v.

Meader, 199.
National Shoe & Leather Bank

v. Herz, 216.
National Surety Co. v. T. B.

32(3

TABLE OF CASES.

References are to pages.

Townsend Brick & Contract-
ins Co., 28, 29, 36.
X;iiional Union Bank v. Landon,

63, 64.
Natusch v. Irving, 173.
Neal's Ex'rs. v. Gilmore, 284.
Neale v. Tnrton, 190.
Needham v. Wright, 274.
Nehrboss v. Bliss, 284.
Neiman v. Neiman, 193.
Nelson v. Hayner, 156, 261.

v.Hill, 287.
Newberger v. Friede, 36.
Newbiggin v. Pillans, 89.
Newbigging v. Adam, 160, 271.
Newby v. Harrell, 251.
Newell v. Cochran, 156.

v. Townsend, 129.
Newhall v. Buckingham, 138.
Newland v. Tote, 12.
Newman v. Bagley, 227.

v. Bean, 30, 31.
Newmarch v. Clay, 218.
Newsom v. Pitman, 255.
Newsome v. Coles, 68.
New York & S. Canal Co. v.

Fuller Bank, 90.
New York Commercial Co. v.

Francis, 235.
New York Dry Dock Co. v.

Treadwell, 248.
New York Life Ins. Co. v. Stat-

ham, 87.
Nichol v. Stewart, 115, 128.
Nichols v. White, 106.
Nicholson v. Moog, 67.

v. Ricketts, 184.
Nicoll v. Mumford, 128, 131.

v. Ogden, 146.

v. Town of Huntington, 163.
Niehoff v. Dudley, 21, 29, 31.
Nims v. Nims, 117.
Nirdlinger v. Bernheimer, 12.
Nisbet v. Nash, 10.

Niven v. Spickerman, 291.
Nix v. First Nat. Bank, 210.
Nixon v. Nash, 137, 138, 139.
Nolan v. Lovelock, 10, 194.
Noonan, In re, 222.
Noonan v. Nunan, 131.
Nordlinger v. Anderson, 225.
Norman v. Jackson Fertilizer

Co., 221.
North v. Mudge, 192.
North Pac. Lumber Co. v. Spore,

91.
North Pennsylvania Coal Co.'s

Appeal, 198.
Northrup v. McGill, 136.
v.Phillips, 95, 158.
Norton v. Seymour, 105.
Norway v. Rowe, 258.
Noyes v. New Haven, etc. R.

Co., 194.
Nussbaumer v. Becker, 214, 215.
Nutting v. Ashcroft, 113.

<).

Oak Ridge Coal Co. v. Rogers,

292.
O'Brien v. Hanley, 163.
Ogden v. Astor, 286.
Oliphant v. Mathews, 108.
Oliver v. Forrester, 261, 281, 286.
v. Gray, 25, 46.
v. Olmstead, 282.
Olmstead v. Webster, 222.
O'Neil v. Salmon, 227.
Ontario Bank v. Hennessey, 102,

105.
Oppenheimer v. demons, 27, 38,

39, 41, 46, 66, 80, 107.
Orr v. Cooledge, 89.
Orvis v. Curtiss, 40.
Osbrey v. Reimer, 35.
Osburn v. Farr, 88, 242.
Osgood v. Glover, 187.

TABLE OF CASES.

327

References are to pages.

O. S. Kelly Co. v. Zarecor, 141.
Oteri v. Scalzo, 271.
Overholt's Appeal, 235.
Owen, Ex parte, 122.
Ozborn v. Woolworth, 201.

P.

Page v. Brant, 206, 240, 248.

v. Citizens' Banking Co., 202.

v.Thomas, 119, 126, 127.

v. Thompson, 251, 253.
Pahlman v. Graves, 236.

v. Taylor, 190.
Paige v. Paige, 125, 143.
Paine v. Thacher, 163, 255.
Painter v. Painter, 285.
Painter's Ex'rs v. Painter, 282.
Palliser v. Erhardt, 27, 31, 189.
Palmer v. Dodge, 278.

v. Maxwell, 284.

v. Purdy, 221.

v. Sawyer, 274.

v. Scott, 78, 1S9, 190, 203.

v. Stephens, 104, 106, 107,
108.

v. Tyler, 51.
Parchen v. Anderson, 37, 71.
Parker v. Bethel Hotel Co., 59.

v. Canfield, 14, 15, 16, 28, 29,
31, 32, 37, 214.

v. Cousins, 278.

v. Fergus, 29, 32, 42, 44.

v. Merritt, 178.

v. Pistor, 138.
Parmalee v. Wiggenhorn, 211.
Patch v. Wheatland, 105.
Patterson v. Blake, 134.

v. Brewster, 94.

v. Seaton, 225.

v. Silliman, 175.

v. Ware, 257.
Patterson's Appeal, 96.
Pattison v. Blanchard, 39, 41.

Patton v. Leftwich, 283.
Paul v. Cullum, 25, 135.
Pawsey v. Armstrong, 110.
Payne v. Freer, 165.
v. Hornby, 177.
v. James, 208.
v. Matthews, 229, 234, 239.
v. Thompson, 90.
Peacock v. Cummings, 172.

v. Peacock, 117, 136, 151,
265, 274.
Pearce v. Ham, 266.
v. Pearce, 122.
v. Wilkins, 194, 219.
Pearpoint v. Graham, 267.
Pearson v. Keddy, 176, 288.
Pease v. Hewitt, 272.

v. Hirst, 244.
Pechell v. Watson, 244.
Peckham Iron Co. v. Harper,

200.
Peele, Ex parte, 243.
Pelletier v. Couture, 88.
Pendleton v. Cline, 109.

v. Phelps, 284.
Penn v. Fogler, 210.

v. Stone, 254.
Pennock v. Swayne, 253.
Pennypacker v. Leary, 94.
Pentz v. Stanton, 249.
People v. Croton Aqueduct
Board, 104.
v. North River Sugar Refin-
ing Co., 90.
Peoria Marine & Fire Ins. Co. v.

Hall, 188.
Pepper v. Pepper, 125, 131, 143.
Percifull v. Piatt, 124.
Perkins v. Fisher, 222.
Perrin v. Keene, 278.
Perrine v. Hankinson, 32.
Perring v. Home, 52.
Perry v. Randolph, 249.
Person v. Wilson, 12S.

328

TABLE OF CASES.

References are to pages.

Personette v. Pryme, 87.

Perth Amboy Mfg. Co. v. Con-

dit, 297.
Peters v. Bain, 234.

v. McWilliams, 268.
Peterson v. Roach, 196.
Pettis v. Atkins, 291.
Pettyjohn's Ex'rs. v. Woodruff's

Ex'rs, 236.
Pettyt v. Janeson, 150.
Pfeffer v. Steiner, 280.
Phelps v. McNeely, 224, 226.

v. State, 264.
Philipp v. Von Raven, 272.
Philips v. Samuel, 30.
Phillips v. Blatchford, 290.

v.Cook, 140.

v. Pennywit, 243.

v. Phillips, 4, 5.

v. Purington, 57.

v. Reeder, 155.
Phillipsburgh Bank v. Fulmer,

74.
Philpott v. Bechtel, 243.
Pierce v. Bryant, 296, 298.

v. Covert, 143.

v. Daniels, 157.

v. McClelland, 153.

v. Scott, 169.

v. Shippee, 35, 47.

v. Whitney, 51.
Pierce's Adm'r v. Trigg's Heirs,

133, 141.
Pierpont v. Lanphere, 29, 36.
Pilcher, Succession of, 97.
Pillans v. Harkness, 271.
Pillsbury v. Pillsbury, 25, 56.
Pinckney v. Wallace, 283.
Pine v. Ormsbee, 265.
Pipe v. Bateman, 291.
Pirtle v. Penn, 257.
Pitkin v. Benfer, 196, 214.

v.Pitkin, 15, 30, 261.

I 'hi nters' & Miners' Bank v. Pad-
gett, 62.
Piatt v. Halen, 243.

v. Piatt, 111, 152.
Pi inner v. Gregory, 203.

v. Lord, 90.
Plunkett v. Dillon, 93.
Podgett v. Ford, 29.
Podrasnik v. R. Martin Co., 80.
Poillon v. Secor, 70.
Polk v. Buchanan, 21, 30.

v. Oliver, 68.
Pollard v. Stanton, 39, 41.
Pomeroy v. Benton, 153.
Poole v. Fisher, 66.
Pooley v. Driver, 3, 17, 20, 22, 23,
37, 40, 47, 100, 180.

v. Whitmore, 78, 181, 183,
184, 187, 189, 190, 192.
Pope v. Cole, 288.
Porter v. Curtis, 29, 39.

v. Taylor, 187.
Post v. Kimberly, 25.

v. Southern R. Co. 45.
Pott v. Eyton, 71.
Potter v. Tolbert, 216, 265, 276,

278.
Powell v. Maguire, 95.
Power v. Kirk, 269.
Pratt v. Langdon, 73.

v. McGuinness, 128.
Prentice v. Elliott, 165, 168.
Prentiss v. Foster, 250.
Preston v. Colby, 227, 229.

v. Fitch, 128.
Price v. Alexander, 14, 29, 39,
191.

v. Barker, 219.

v. Cavins, 239.

v. Drew, 252.
Priest v. Chouteau, 35, 123, 176.
Priestly v. Fernie, 249.
Prince v. Crawford, 189.

TABLE OF CASES.

329

References

Pringle v. Leverich, 66, 70, 71.
Prouty v. Swift, 30.
Pugh's Heirs v. Currie, 145.
Pullen v. Whitfield, 288.
Purdy v. Powers, 247.
Purple v. Farrington, 224.
Pursley v. Ramsey, 102.
Purviance v. McClintee, 13.
Purvins v. Champion, 252, 254.
Purvis v. Butler, 249.
Putnam v. Ross, 207.
v. Wise, 41, 44.

Q.

Quackenbush v. Sawyer, 32, 44.
Queen v. Arnaud, 59.
Quin v. Myles, 108.

Railsback v. Lovejoy, 125.
Rainey v. Nance, 176.
Raisbeck v. Oesterricher, 62.
Ralston v. Moore, 285.
Rammelsberg v. Mitchell, 110,

111, 124.
Rand v. Wright, 261.
Randall v. Knevals, 205.
Randel v. Yates, 85.
Randle v. Richardson, 136.

v. State, 29.
Rankin v. Fairley, 252.
Ratzer v. Ratzer, 136.
Raub v. Smith, 86.
Rawlins v. Wickham, 271.
Rawlinson v. Clarke, 30, 84.
Raymond v. Putnam, 114, 117.

v.Vaughn, 89, 154, 271.
Read v. Bailey, 219, 238.

v. Smith, 95.
Reddington v. Lanahan, 25,. 29.
Redfield v. Gleason, 163.

are to pages.

Reed v. Murphy, 32.

v. Vidal, 258.
Rees v. Duncan, 129, 130, 132.
Reg. v. Robson, 54.
Rehfuss v. Moore, 296.
Reid, Ex parte, 237.
Reid v. F.W. Kreling's Sons' Co.,
68.

v. Hollinshead, 56, 196.

v. Rigby, 199.
Reilly v. Reilly, 12.
Reinheimer v. Hemingway, 139.
Reiter v. Morton, 272.
Remick v. Emig, 136, 261, 282.
Renfrow v. Pearce, 153, 279.
Renton v. Chaplain, 269.
Reppert v. Colvin, 277.
Reyburn v. Mitchell, 223.
Reynell v. Lewis, 60.
Reynolds v. Bowley, 237.

v. Cleveland, 196.

v. Creveling, 296.

v. Hicks, 12.

v. Pool, 44.
Rhodes v. Moules, 203.
Rianhard v. Hovey, 64.
Ricart v. Townsend, 284.
Rice v. Barnard, 76, 232.

v.Barrett, 71.

v. Culver, 254.

v. Merchants' & Planters'
Nat. Bank, 280.

v.Woods, 219.
Richard v. Allen, 138.

v. Mouton, 275.
Richards v. Grinnell, 38, 39, 47,
86, 94, 117.

v. Heather, 284.

v.Hunt, 212.

v. Todd, 271.
Richardson v. Bank of England,
98, 99.

v. Carlton, 297.

v. Farmer, 248.

330

TABLE OF CASES.

References are to pages.

Richardson v. Gregory, 264.

v. Hogg, 296, 298.

v. Hughitt, 30, 31.

v. Lester, 191.

v. Moies, 275.
Riches, In re, 185, 189.
Richmond v. Heapy, 245.

v. Judy, 54.

v. Voorhees, 122.
Ricketts v. Bennett, 189.
Riddle v. Etting, 275.

v. Whitehill, 124, 125, 143.
Ridenour v. Mayo, 64.
Rider v. Hammell, 48.
Rieser, In re, 233.
Rimel v. Hayes, 71.
Rittenhouse v. Leigh, 67.
Roach v. Perry, 136, 163, 164.
Robb v. Mudge, 225.

v. Shephard, 74.

v. Stevens, 223, 231, 232.
Robbins v. Butler, 291.

v. Deveriell, 243.

v. Fuller, 274, 275.

v. Laswell, 39, 47, 150.
Robbins Elec. Co. v. Weber, 295.
Roberts v. Eberhardt, 181, 257,
259.

v. Johnson, 207, 249.

v. Kelsey, 261, 280, 2S6.

v. McCarty, 176.

v. Rowan, 240.
Robertson v. Baker, 177.

v. Burrell, 286.

v. Corsett, 100.
Robinson v. Allen, 224.

v. Anderson, 117.

v. Ashton, 122.

v. Compher, 35.

v. Floyd, 216.

v. Goings, 200.

v. Haas, 45.

v. Magarity, 103.

v. Parker, 24, 35, 48.

Ribinson v. Simmons, 163, 282r
285.

v. State, 205.

v. Taylor, 27.

v.Ward, 101.

v.Wilkinson, 220.
Robinson Bank v. Miller, 119,

122, 126, 143.
Roby v. Colehour, 152, 155.
Rodgers v. Clement, 167.

v. Meranda, 229, 232, 233,
234, 235.
Roessler's Estate, In re, 282.
Rogers v. Batchelor, 247.

v. Raynor, 244.

v. Rogers, 253.

v. Taintor, 108, 112.
Rohlfing v. Carper, 210.
Rolfe v. Dudley, 201.

v. Flower, 211.
Roop v. Herron, 226.
Roosevelt v. McDowell, 284.
Rooth v. Quin, 216.
Roots v. Mason City S. & M.

Co., 275.
Ropes v. Colgate, 295, 296.
Rose v. Bradley, 254.

v. Coffield, 216.
Rosenfield v. Haight, 14, 22, 40.
Rosenkranz v. Barker, 202, 207.
Rosenstein v. Burns, 271, 272.
Rosenstiel v. Gray, 9.
Rosenthal v. Hasberg, 281.
Ross v. Carson, 251.

v. Cornell, 268.

v. Henderson, 125.

v. Parkyns, 30, 38.
Rouss v. Wallace, 224.
Rowe v. Wood, 168.
Rowland v. Long, 14, 29.
Rowlandson, Ex parte, 14.
Ruckman v. Decker, 47.
Ruddick v. Otis, 39.
Ruffin, Ex parte, 128, 131, 176,

TABLE OF GASES.

331

References are to pages.

178, 226, 231, 232, 261, 262,
263, 264.
Rule v. Jewell, 258.
Ruinsey v. Briggs, 197.
Runnels v. Moffat, 25.
Rusling v. Brodhead, 284.
Russell v. Lennon, 244.

v. McCall, 129.

v. Minnesota Outfit, 251, 253.

v. Russell, 175.
Rust v. Cliisolm, 213.
Rutherford v. Hill, 63.

v. McConnell, 186, 188.
Ryall v. Rowles, 177.
Ryder v. Gilbert, 136.

v.Wilcox, 25, 38, 47, 254,
255.
Ryland v. Hollinger, 60.

s.

Sage v. Chollar, 232.

v. Sherman, 94, 105.
Sailors v. Nixon-Jones Printing

Co., 23, 25, 50.
St. Barbe, Ex parte, 238.
St. John v. Hendrickson, 271.
Salmon v. Davis, 245.
Salter v. Edward Hines Lumber
Co., 210, 211.
v. Ham, 21, 30.
Sanborn v. Royce, 128.
Sanchez v. Goldfrank, 269.
In re Sandusky, 228.
Sandusky v. Sidwell, 248.
Sanford v. Board of Sup'rs of
New York, 292.
v. Mickles, 275.
Sangston v. Hack, 29, 151.
Sankey v. Columbus Iron Wr'ks,

47.
Sargent v. Downey, 56.
Sarmiento v. The Catherine C,
297.

Satterthwait v. Marshall, 258.

Saul v. Kruger, 244.

Saunders v. Bartlett, 138.

v. Reilly, 208, 224, 225, 230.

Savage v. Putnam, 221.

Savery v. Thurston, 170.

Saville v. Robert, 210.

Savings & Loan Soc. v. Gibb,
287.

Sawyer v. First Nat Bank, 47.

Scarf v. Jardine, 68, 73, 206, 222.

Schlater v. Winpenny, 263, 264.

Schleicher v. Walker, 225.

Schlicher v. Vogel, 252.

Schmidlapp v. Currie, 224, 225.

Schnaier v. Schmidt, 253.

Schoneman v. Fegley, 276.

School District v. Insurance Co.,
292.

Schuster v. Farmers' & Mer-
chants' Nat Bank, 231.

Schwabacker v. Riddle, 201.

Scott v. Campbell, 35.
v. Conway, 248.
v. McKinney, 121.
v. Raymen, 258.

Scott's Appeal, 239.

Scudder v. Ames, 161, 286.

Scull, Appeal of, 67.

Seabury v. Bolles, 49, 67, 69, 71,
72.

Seacord v. Pendleton, 62.

Seattle Board of Trade v. Hay-
den, 90.

Sebastian v. Booneville Academy
Co., 255, 272.

Second Nat. Bank v. Burt, 232.
v. Hall, 62, 63.

Secor v. Keller, 242.
v. Lord, 291.

Seeberger v. McCormick, 63.
v. Wyman, 192.

Seger's Sons v. Thomas Bros.,
224.

332

TABLE OF CASES.

References

Seibert v. Bakewell, 297.
Seibert's Assignee v. Ragsdale,

L67, L68.
Selclen v. Hall, 298.
Seldner v. Mt. Jackson Nat.

Bank, 274.
Selkrig v. Davies, 141.
Sells v. Hubbell's Adm'rs, 160,

217.
Serviss v. McDonnell, 211.
Setzer v. Beale, 12.
Sexton v. Anderson, 223, 224,
225.
v. Lamb, 115.
v. Sexton, 153.
Shackleford's Adm'r v. Clark,

285.
Shafer v. Randolph, 71.
Shaffer v. Martin, 204.
Shain v. Du Jardin, 107.
Shamburg v. Abbott, 221.
Shanks v. Klein, 125, 129, 132,

143.
Shapard v. Haynes, 215.
Sharp v. Hutchinson, 297.
Shattuck v. Chandler, 192, 283.

v. Lawson, 253.
Shaver v. White, 138, 139.
Shaw v. Gait, 19.
Shea v. Donahue, 116.
Shearer v. Shearer, 128, 133,

134, 135, 141, 143, 144, 282.
Sheble v. Strong, 295, 298.
Sheldon v. Bigelow, 71.
Shepard v. Pratt, 29.
Sheridan v. Medara, 31.
Sherman v. Kreul, 258.
Sherrod v. Langdon, 74, 215.
Sherwood v. St. Paul & C. R.
Co., 86.
v. Snow, 190.
Shoemaker Piano Mfg. Co., v.

Bernard, 211.
Short v. Stevenson, 156.

are to pages.

Shriver v. McCloud, 95.
Siegel v. Chidsey, 199, 262.
Siegel, Cooper & Co. v. Schueck,

140.
Sigourney v. Munn, 133.
Sikes v. Work, 252.
Sillitoe, Ex parte, 230, 233.
Silver v. Barnes, 54.
Silveu's Ex'rs. v. Porter, 89.
Simmons v. Ingram, 63, 85.
Simonton v. McLain, 91.

v. Sibley, 188.
Simpson v. Leech, 132.

v. Tenney, 94.
Simpson's Claim, 184.
Sims v. Smith, 264.
Simson v. Ingham, 218.
Sindelare v. Walker, 131, 244.
Singer v. Carpenter, 224, 225,
226.

v.Kelly, 293, 297.
Singleton v. Knight, 193.
Sirrine v. Briggs, 139.
Sizer v. Daniels, 54.

v.Ray, 210.
Skavdale v. Moyer, 138, 139.
Skillman v. Lachman, 10.
Skinner v. Dayton, 9, 267, 291.

v. Tinker, 265.
Skipp v. Harwood, 177.
Slater v. Slater, 110, 111, 122.
Slemmer's Appeal, 267.
Sloan v. Moore, 188.
Slocum v. Hooker, 248.
Slutts v. Chafee, 206.
Smith, Ex parte, 122.
Smith, In re, 138.
Smith v. Argall, 295.

v. Ayrault, 162.

v. Black, 222.

v. Brannon, 57.

v. Brown, 163.

v. Burnham, 86.

v. Canfield, 248.

TABLE OF CASES.

333

References are to pages.

Smith v. Collins, 78, 191, 196.

v. Colorado Fire Ins. Co., 63.

v. Craven, 199.

v. Emerson, 139.

v. Everett, 110, 131.

v. Heineman, 226.

v. Hill, 68, 71.

v. Jeyes, 148, 149, 272.

v. Kemp, 255.

v. Ludlow, 276.

v. Mulock, 267.

v. Orser, 138.

v. Ramsey, 146.

v. Shelden, 221, 276, 278.

v. Sloan, 78, 189, 190.

v. Small, 35, 113, 120.

v.Smith, 121, 228, 285.

v. Tarlton, 85, 86, 121, 132.

v. Vandeburg, 31, 32, 264.

v.Walker, 25.

v. Watson, 46.

v.Wood, 129.
Smythe v. Harvie, 274.
Snaith v. Burridge, 185.
Sneed v. Deal, 155.
Snell v. Crowe, 138.

v. De Land, 35, 94.

v. Dwight, 95.

v. Stone, 90.
Snider's Sons Co. v. Troy, 62.
Snodgrass v. Reynolds, 50.
Snodgrass's Appeal, 224, 231.
Snyder v. Burnham, 10.

v. Seaman, 149.
Sohier v. Johnson, 108.
Sohns v. Sloteman, 30.
Solly v. Forbes, 219.
Solomen v. Kirkwood, 9, 265, 267.
Somerby v. Buntin, 47, 85, 259.
Somerset Potters Works v.

Minot, 237.
Soper v. Fry, 192.
Southern v. Grim, 214.

Southern Fertilizer Co. v.

Reams, 19.
Southwick v. McGovern, 215.
Sowerby v. Butcher, 249.
Spalding v. Wilson, 125.
Sparrow v. Chisman, 245, 246.

v. Kohn, 109.
Spaulding v. Stubbings, 24, 40,

47.
Speake v. Prewitt, 80.
Speer v. Bishop, 212.
Spencer v. Field, 249.

v. Jones, 49, 93, 94, 226.
Spencer Optical Mfg. Co. v.

Johnson, 295, 298.
Sperry's Estate, In re, 237.
Sprout v. Crowley, 251.
Spry Lumber Co., John, v. Chap-
pell, 230.
Spruck v. Leonard, 264.
Spurr v. Cass, 243.
Staats v. Bristow, 131.
Stables v. Eley, 74, 200, 215.
Stafford v. Gold, 129.

v. Sibley, 29.
Stafford Nat. Bank v. Palmer,

62, 64.
Stanchfield v. Palmer, 15.
Standard Wagon Co. v. Few,

185.
Standish v. Babcock, 176.
Stanhope v. Swafford, 200.
Stanton v. Westover, 225, 226,

227.
Stapleton v. King, 11, 43.
Starbuck v. Shaw, 252.
Starr v. Case, 218.
State v. How, 62.
v. Hunt, 30.
v. Withrow, 281, 283.
State Bank v. O. S. Kelley Co.,

56.
Staver & Abbott Mfg. Co. v.

Blake, 298.

334

TABLE OF CASES.

References are to pages.

Stead v. Salt, 187, 191.
Stearns v. Haven, 74.
Stecker v. Smith, 188.
Steele v. First Nat. Bank, 187,

194.
Steiglitz v. Egginton, 191, 198.
Stein v. Robertson, 88.
Steiner v. Peters Store Co., 227.

v. Steiner Land & Lumber
Co., 282.
Steinfeld v. Nat. Shirt Waist

Co., 112.
Stephens v. Reynolds, 189, 197.
Stevens, In re, 222.
Stevens v. Faucet, 21, 46, 249.

v. Gainesville Nat. Bank, 25.

v. McLachlan, 189.

v. Perry, 208.
Steward v. Blakeway, 123.
Stewart, Assignment of, 224.
Stewart, In re, 229.
Stewart v. Robinson, 261, 282.
Stimson v. Lewis, 291.
Stockdale v. Maginn, 279.
Stockman v. Michell, 30.
Stockton v. Frey, 207, 249.
Stockwell v. Inhabitants of
Brewer, 101.

v. United States, 202.
Stokes v. Findlay, 63.

v. Hodges, 166.
Stone v. Aldrich, 255.

v. West Jersey Ice Mfg. Co.,
30.
Storm v. Roberts, 241.
Story v. Richardson, 244.
Stout v. Baker, 208.

v. Zulick, 62.
Strader v. White, 14.
Straus v. Kohn, 183, 189.
Strauss v. Frederick, 130.
Strong v. Lord, 132, 143, 145.
Struthers v. Pearce, 155.
Stuart v. Gladstone, 175.

Stubbs v. Sargon, 98.
Stumph v. Bauer, 139.
Suan v. Caffe, 90.
Sullivan v. Campbell, 291.

v. Visconti, 187.
Summer v. Powell, 287.
Sutro v. Wagner, 272.
Sutton v. Dillaye, 274.
Swan v. Gilbert, 228.

v. Steele, 198.
Swann v. Sanborn, 231.
Swasey v. Antram, 89.
Sweeney v. Neely, 168, 188.
Sweet v. Morrison, 255.
Sweetzer v. Mead, 192.
Swift v. Jewsbury, 201.
Swope v. Burnham, 109.
Swords v. Owen, 108.
Sydam v. Cannon, 221.
Sykes v. Beadon, 95.
Sylvester v. Smith, 250.

Tabb v. Gist, 7, 9.
Taft v. Buffum, 269.

v. Schwamb, 113, 117, 135,
165.
Talcott v. Dudley, 262.
Talmage v. Millikin, 192.
Tapley v. Butterfield, 192.
Tappan v. Blaisdell, 139.
Tarbell v. Page, 62.
Tarver v. Evansville Furniture

Co., 276.
Tassey v. Church, 253.
Tate v. Clements, 277.
Tayloe v. Bush, 25, 44.
Taylor v. Castle, 10.

v. Church, 244.

v. Coffing, 116, 117, 135-137.

v. Davis, 169.

v. Dorr, 163.

v. Hotchkiss, 262.

TABLE OF CASES.

335

References are to pages.

Taylor v. Hutchison, 263.

v. Penny, 8.

v. Post, 218.

v. Riggs, 231.

v. Taylor, 130.

v. Terme, 14, 30.

v. Thompson, 253.
Teague v. Lindsey, 225.
Tebbetts v. Dearborn, 154.
Teed v. Parsons, 54.
Tennant, Ex parte, 22, 28.
Tenney v. Foote, 95, 96, 201.

v. Johnson, 231.
Tevis v. Carter, 255.
Texas & P. R. Co. v. Suissen, 30.
Thayer v Augustine, 32, 33.

v. Badger, 163.

v. Humphrey, 231.

v. Lane, 131.
Thicknesse v. Bromilow, 189.
Thillman v. Benton, 31.
Third Nat. Bank v. Snyder, 78,

189, 190.
Thomas v. Atherton, 160, 162.

v. Dakin, 58, 292.

v. Green, 66, 70.

v. Lines, 150.

v. Pennrich, 247.
Thompson v. Bowman, 128.

v. First Nat. Bank, 48, 67, 71.
72.

v. Gray, 109.

v. Noble, 167, 275.

v. Percival, 220.

v. Smith, 254.

v. Snow, 32.
Thomson v. Davenport, 250.
Thornton v. Dixon, 141.

v. George, 42.

v. McDonald, 29.
Thursby v. Lidgerwood, 121, 128,

213, 274.
Thurston v. Horton, 56, 57.

v. Perkins, 51.

Tidd v. Rines, 104, 124, 125.
Tilford v. Ramsey, 104.
Tilge v. Brooks, 295, 299.
Tillar v. Cook, 258.
Tillinghast v. Champlin, 132.
Titcomb v. James, 202.
Tobey v. McFarlin, 131.
Tobias v. Blin, 32.
Todd v. Jackson, 203.

v. Pennington, 95.

v. Raff erty's Adm'rs, 157.
Tom v. Goodrich, 198.
Tomlinson v. Bricklayers' Union

No. 1, 59.
Tood v. Rafferty's Adm'rs, 96.
Toof v. Duncan, 204.
Topping, Ex parte, 239.
Topping v. Paddock, 113.
Towle v. Meserve, 251.
Townsend v. Goewey, 148.
Tracy v. Tuffly, 295, 298.
Traphagen v. Burt, 121, 258.
Tredwe v. Rascoe, 138.
Trego v. Hunt, 168.
Troughton v. Hunter, 213.
Trowbridge v. Cross, 132.

v. Scudder, 64.
Trundle v. Edwards, 284.
Tucker v. Cole, 181.

v. Oxley, 222.
Turner v. Jaycox, 232.

v. Major, 110.

v. Smith, 138.
Tutt v. Land, 167.
Tygart v. Wilson, 170.
Tyler v. Scott, 35.

v. Waddingham, 196.
Tyrrell v. Washburn, 290, 291.

u.

Uhler v. Semple, 6, 153, 177.
Ulery v. Ginrich, 189.
Union Nat. Bank v. Bank of
Commerce, 234.

136

TABLE OF CASES.

References are to pages.

United States v. Colin, 205.

United States Bank v. Binney,
76, 197.

United States Exp. Co. v. Bed-
bury, 241, 292.

Unity Ins. Co. v. Cram, 63.

Ussery v. Crusman, 295, 298.

V.

Vacarro v. Toof, 215.
Vail v. Winterstein, 89.
Valentine v. Hiekle, 210.

v. Wysor, 286.
Van Aernani v. Bleistein, 292.
Van Aken v. Clark, 132.
Van Brunt v. Applegate, 188.
Vance v. Blair, 184.
Vanderburg v. Bassett, 187.
Vanderburgh v. Hull, 39.
Vandike's Appeal, 139.
Vandike v. Rosskam, 298.
Vanhorn v. Corcoran, 298.
Van Ingen v. Whitman, 295,

296.
Van Keuren v. Parmelee, 275,

277.
Van Kleeck v. McCabe, 231, 261.
Van Kuren v. Trenton L. & M.

Mfg. Co., 24, 25, 257.
Van Name v. Van Name, 136.
Vannerson v. Cheatham, 89.
Van Ness v. Fisher, 264.
Van Reimsdyk v. Kane, 106.
Van Riper v. Poppenhausen, 293.
Van Valen v. Russell, 237.
Van Valkenburg v. Bradley, 278.
Van Voorhis v. Webster, 122.
Venable v. Levick, 188.
Vere v. Ashby, 211.
Vernon v. Manhattan Co., 216.
Vicory v. Strausbaugh, 138.
Viles v. Bangs, 247.
Vinsen v. Lockard, 88.
Vinson v. Beveridge, 29, 70, 71,

73.

Von Schmidt v. Huntington, 291.
Voorhees v. Jones, 40, 41.
Voorhis v. Baxter, 284.
v. Child's Ex'r, 288.
Vredenburg v. Behan, 62.

w.

Wadley v. Jones, 258.
Waggoner v. First Nat. Bank, 2,
26, 28, 30, 31, 37, 40, 41, 48, 49.
Wagner v. Simmons, 78, 189, 190.
Wagnon v. Clay, 190.
Wahl v. Barnurn, 86.
Wait v. Brewster, 68.
Wakeham, In re, 97.
Walburn v. Ingilby, 291.
Walden v. Sherburne, 39, 41, 276.
Wallace v. Fitzsimmons, 281.

v. Kelsall, 245, 246.
Walling v. Burgess, 132.
Walker v. Anglo-American Mort-
gage & Trust Co., 201,
207.

v. Davis, 269.

v. Doane, 284.

v. Eyth, 232.

v. Wait, 100.

V.Whipple, 265, 266, 267.
Walsh v. Lennon, 78, 191.
Walstrom v. Hopkins, 220.
Walter v. Herman, 233.
Wantling v. Howarth, 264.
Wapello County v. Bigham, 285..
Ward v. Barber, 275.

v. Bodeman, 57.

v. Brigham, 62.

v. Espy, 125.

v. Motter, 249, 250.

v. Thompson, 47, 115.

v. Tyler, 276.
Warder v. Newdigate, 247.
Warfel v. Calder, 145.
Warner v. Griswold, 95, 201, 242,.
243.

TABLE OF CASES.

337

References

Warner v. Leisen, 272.
Warren v. Ball, 215.

v. Farmer, 230, 236.

v. Schainwald, 153.

v. Sterns, 251.
Washburn v. Washburn, 155.
Washington v. Washington, 116.
Waterbury v. Head, 242.

v. Merchants' Union Exp.
Co., 172, 292.
Waterer v. Waterer, 123.
Waterman v. Hunt, 226.
Waters v. Taylor, 138, 140.
Watson, Ex parte, 66.
Watson v. Hinchman, 200.

v. Murray, 95.
Watt v. Kirby, 250.
Waugh v. Carver, 13, 14, 17, 18,

22, 30, 66, 70.
Waverly Nat. Bank v. Hall, 40.
Way v. Stebbins, 280.
Wayt v. Peck, 139.
Weaver v. Rogers, 245, 246.

v. Tapscott, 106, 188.
Webb v. Fordyce, 168.

v. Johnson, 12.
Webster v. Clark, 21, 24, 27, 33,
47, 49, 71, 72.

v.Webster, 69.
Wedderburn v. Wedderburn, 122.
Wehrman v. McFarlan, 6, 22, 54,

290.
Weil v. Guerin, 248, 285.

v. Jaeger, 229.
Weirick v. Graves, 196.
Welker v. Wallace, 203.
Welles v. March, 262.
Wells v. Babcock, 165.

v. Carpenter, 254.

v. Ellis, 262.

v. Gates, 290, 291.

v. McGeoch, 153.

v. Marsh, 192.

v. Mitchell, 245, 246, 251.
99

are to pages.

Welsh v. Canfield, 135.
Wessels v. Weiss, 13, 18, 32.
West, In re, 237.
West v. Skip, 128, 130, 131, 138,

176, 177, 232, 233.
Western Stage Co. v. Walker,

172, 274.
West Hickory Min. Ass'n v.

Reed, 126, 143.
West Philadelphia Bank v.

Gerry, 222.
West Point Foundry Ass'n v.

Brown, 60.
Weston v. Ketcham, 155.
Wetherbee v. Potter, 255.
Wheat v. Rice, 211.
Wheatley's Heirs v. Calhoun,

120.
Wheeler v. Arnold, 160.
v. Farmer, 27, 29, 42.
v. McEldowney, 67.
v. Sage, 158.
Wheeling Corrugating Co. v.

Veach, 220.
Wheelock v. Moulton, 59.
Wherman v. McFarlan, 180.
Whipple v. Parker, 85.
Whitaker v. Brown, 203.
Whitcomb v. Converse, 113, 116,
117, 136, 166.
v. Whiting, 277.
White v. Cuyler, 198.
v. Eiseman, 298.
v. Jones, 139.
v.Woodward, 138.
Whitehead v. Bank of Pitts-
burgh, 279.
Whitehill v. Shickle, 39.
Whiting v. Farrand, 274.

v. Leakin, 29, 30, 84, 92, 115,
265.
Whitlock v. McKechnie, 103.
Whitman v. Bowden, 156.
v. Keith, 241.

338

TABLE OF CASES.

References

Whitton v. State, 205.
Whitwell v. Arthur, 271.

v. Perrin, 222.
Whitworth v. Harris, 259.

v. Patterson, 237.
Wickham v. Wickham, 219.
Wiegand v. Copeland, 126.
Wiesenfeld v. Byrd, 285.
Wiggin v. Blackshear, 227.

v. Goodwin, 269.
Wiggins v. Blackshear, 225.
Wilcox v. Derickson, 262.

v. Dodge, 38.

v. Kellogg, 224.

v. Wilcox, 144.
Wild v. Davenport, 19, 37, 261.

v. Dean, 220.

v. Milne, 133, 134.
Wilder v. Keeler, 228, 229, 234.
Wiley v. Logan, 243.
Wilkerson v. Henderson, 287.
Wilkins v. Davis, 297.

v. Pearce, 192, 194.
Wilkinson v. Frasier, 41, 44.

v. Henderson, 287.
Willet v. Brown, 143.

v. Chambers, 77, 203.
Williams, Ex parte, 211, 288.
Williams, In re, 106.
Williams v. Bank of Michigan,
291.

v. City of Saginaw, 101.

v. Frost, 192.

v. Gillies, 86, 121, 125, 143.

v. Henshaw, 254.

v. Jones, 85.

v. Lewis, 138, 139, 182.

v. Muthersbaugh, 207.

v. Robbins, 250.

v. Shelden, 126.

v. Soutter, 39.

v. Thomas, 190.

v. Whedon, 283.
Williamson v. Adams, 178.

are to pages.

Williamson v. Barbour, 181.

v.Barton, 250.

v. Johnson, 106.
Willis v. Barron, 251.

v. Bremner, 199.

v. Crawford, 5.
Wills v. Jones, 244.

v. Simmonds, 35.
Willson v. Nicholson, 129.

v. Owen, 95.
Wilson v. Bean, 295.

v. Black, 119.

v. Campbell, 50, 51.

v. Church, 272.

v. Greenwood, 135.

v. Keller, 279.

v. Richards, 183.

v. Robertson, 225.

v. Rockland Mfg. Co., 242.

v. Simpson, 151.

v. Soper, 225, 283, 284.

v. Tumman, 200.

v. Wallace, 243.

v. Waugh, 269.

v. Whitehead, 17, 210.
Wilson's Ex'rs v. Cobb's Ex'rs,

4, 5.
Winchester v. Glazier, 149, 166,

167.
Winne v. Brundage, 30.
Winship v. Bank of United
States, 78, 81, 107, 181, 183,
184, 196.
Winstanley v. Gleyre, 93, 94, 156.
Winter v. Pipher, 39.

v. Stock, 124.
Wipperman v. Stacy, 194.
Witter v. McNiel, 199.
Wittkowsky v. Ried, 218.
Wittram v. Van Wormer, 199.
Woelfel v. Thompson, 117.
Wolcott v. Gibson, 95.
Wolf v. Mills, 201.

v. Selling, 124.

TABLE OF CASES.

339

References are to pages.

Wolfe v. Gilmer, 136.

v. Joubert, 108, 109.
Wolff v. Madden, 210.
Wood v. Beath, 33, 174.

v. Braddick, 276, 288.

v. Connell, 9.

v. Culen, 248.

v. Cullen, 53.

v. Duke of Argyll, 60, 70.

v. Erie R. Co., 109.

v. Luscomb, 200, 207, 249.

v. Pennell, 71, 72.

v. Woad, 175.
Woodhouse v. Duncan, 250.
Woodling v. Knickerbocker, 202.
Woodmansie v. Holcomb, 224,

225.
Woodruff v. King, 191, 214.

v. Scaife, 183, 184.
Woods v. Wilder, 87, 263.
Woodson v. Wood, 277.
Woodward v. Cowing, 54, 56.

v. McAdam, 124.
Woodward-Holmes Co. v. Nudd,

143, 145.
Woodworth v. Bennett, 95, 96.
Worcester Corn Exchange Co., In

re, 160, 161.
Worley v. Smith, 255.
Wright v. Boynton, 68.

v. Duke, 153.

v. Eastman, 255.

v. Herrick, 248.

v. Hooker, 106, 107, 108.

Wright v. Hunter, 160.

v. Taylor, 22.

v.Ward, 138.
Wyckoff v. Anthony, 187.
Wycoff v. Purnell, 256.
Wyman v. Stewart, 241.

Yale v. Eames, 276.

v. Taylor Mfg. Co., 108.
Yarbrough v. Bush, 241.
Yates v. Lyon, 88.
Yeager v. Wallace, 193, 212.
Yeoman v. Lasley, 93, 94.
Yetzer v. Applegate, 170.
Yonge, Ex parte, 238.
York v. Orton, 220.
York County Bank's Appeal, 228,

231, 232.
Yorkshire Banking Co. v. Beat-
son, 197.
Youmans v. Heartt, 218.
Young, In re, 31.
Young v. Axtell, 70.

v. Scoville, 282, 285.

v. Wheeler, 86, 188.

Zabriskie v. Hackensack, 173.
Zell's Appeal, 163, 285.
Zimmerman v. Erhard, 109.

INDEX.

ACCOMMODATION PAPER —
power of partner to give, 192.

ACCOUNTS AND ACCOUNTING —
interest on balances, 164 et seq.
surviving partner must account to representatives of deceased

partner, 130.
partnership accounts, 168.
right to inspect accounts, 168.

ACTIONS —

see, also, "Parties."

by or against firm, 240 et seq. -""'

in firm name, 240, 241.

by the firm, 241.

against the firm, 247.

between partners, 250.

rule that no action at law lies between partners, 250.
exceptions to rule, 250, 252.

between firms with common member, 253.

— between partners on individual obligations, 254.
suits in equity, 256.

specific performance between partners, 258.
by and against surviving partners, 284.

ACTIVE PARTNERS —
who are, 79.

ADMISSION —

by partner, when binding on firm, 181.
of new member to firm, 6, 263.

ADVANCES —

interest on, allowance in accounting, 167.

AFFIDAVIT—

accompanying certificate of limited partnership, 295.

342 INDEX.

References are to pages.
AGENCY —

mutual agency as a test of partnership, 4, 19.

agent or servant sharing profits in lieu of salary, not a partner,
29.
ALIENS —

capacity to be partners, 87.
ALTERATION —

in constitution of limited partnership, 296.
APPLICATION —

of assets to liabilities, 223.

ARBITRATION —

power of partnership to bind firm by submission to, 191.
ARTICLES OF PARTNERSHIP —

definition, 147.

usual provisions in, 148.

construction, 149.

duty to conform to, 169.

provision for sale of share at valuation, 134.

stipulation for transfer of shares, 8.

ASSETS —

application of, to liabilities, 223.
application by partners, 223.

fraudulent conveyances, 224.
application by court, 227.
priorities in firm property, 229.

firm creditors have priority, 229.

exceptions to rule, conversion of firm into separate

property, 232.
fraudulent conversion of individual property, 232.
separate business, 233.
partners are prior individual creditors, 233.
partners discharged in bankruptcy, 233.
priorities in separate property, 234.

separate creditors have priority, 234.

ASSIGNMENT —

of shares, see "Shares."

of partner's interest, effect, 128, 269.

ASSIGNMENT FOR BENEFIT OF CREDITORS —
powers of partner, 192.

ASSOCIATIONS —

not partnerships, 53.

INDEX. 343

References are to pages.

ASSUMPTION OF DEBTS —

by incoming partner, 210.
ATTACHMENT —

of partner's interest for individual debt, 137.
ATTORNEYS —

implied powers of member of firm of attorneys, 189.

AUTHORITY OF PARTNER —
see "Powers of Partner."

B.

BANKRUPTCY —

effect of discharge to terminate liability, 222.

effect to dissolve firm, 262.
BILLS AND NOTES —

powers of partners with respect to, 189.

liabilities of partners on, 197.

payable to one partner, action on, 244.
BOOKS OF ACCOUNT —

duty to keep, 168, 169.

right to inspect, 168, 169.
BORROWING —

power of partner, 190.

BOVILL'S ACT —

effect, 34, note.
BREACH OF TRUST —

liability for, 200.

misapplication of money or property received for or in custody
of firm, 202.

employment of trust money for partnership purposes, 204.

joint and several liability, 207.

c.

CAPACITY —

of persons to become partners, 87.

CAPITAL —

common stock or capital not essential to partnership, 46.

definition and nature, 113.

distinguished from partnership property, 113, 114.

of partner distinguished from his share, 114.

what may be contributed, 114.

344 INDEX.

References are to pages.
CAPITAL (continued) —

rights of partners as to, 115, 116.
to increase or diminish, 116.
return of, on dissolution, 116.
presumption of equality, 116, 117.
is partnership property, 120.
interest on, allowance in accounting, 166 et seq.
CARE —

duty of partner to exercise, 170.

CARRIERS —

connecting carriers as partners, 45.
CLANDESTINE PROFITS —

right of partner to obtain, 154.
CLUBS —

members of, not partners, 53.
COMMON MEMBER —

actions between firms with, 253.
COMMUNITY OF PROFITS —

see "Co-ownership."

COMPENSATION —

right of partner to compensation for services, 163.
surviving partners, right to, 285.

COMPETENCY —

of persons to become partners, 87.
COMPETITION —

right of partner to compete with firm, 157, 158.
retiring partner, 110.
CONDITIONS PRECEDENT —

waiver of, 51.

CONFESSION OF JUDGMENT —

power of partner, 192.
CONNECTING CARRIERS —

as partners, 45.
CONSENT—

mutual assent of all parties necessary to constitute partner-
ship, 5.

delectus personarum, 6.
CONSIDERATION —

of contract of partnership, 92.

premium for admission to partnership, 93.

INDEX. 345

References are to pages.
CONTINUANCE —

of partnership without new articles, 151.

CONTRACTS —

creating partnerships, see "Partnerships."
partnership not a contract, but a status, 3.
an essential element of partnership, 4.
agreements not concluded do not constitute partnership, 5.
for future partnerships, 49.
of partnership, 83.
construction, 21.
general requisites, 83.
formalities, 83.

necessity of writing, statute of frauds, 84.
who may become partners, 87.
aliens, 87.
infants, 88.
insane persons, 88.
married women, 89.
corporations, 90.
husband and wife, 89.
partnerships, 91.
number of partners, 91.
consideration, 92.
premium, 93.
purposes of partnership, 93.
illegal partnerships, 94.

effect of illegality, 95.
liability of partners on, 195.
bills and notes, 197.
sealed instruments, 198.
reception of benefit by firm, 198.
joint and several liability, 206.
in name of one partner, parties, 247, 250.
CONTRIBUTION AND INDEMNITY —
right of partner to, 159.
in illegal transaction, 161.
limit as to amount of, 161.
how and when enforced, 162.

CONTRIBUTIONS—

what may be contributed to capital, 114.

return of, on dissolution, 116.

of general and special partners in limited partnerships, 295.

340 INDEX.

References are to pages.
CONVERSION —

of firm realty into personalty, 140.
CO-OPERATIVE STORES —

members of, not partners, 54.
CO-OWNERSHIP —

of profits must be intended to constitute partnership, 26.

the ultimate test of partnership, 3, 16, 26.

distinguished from partnership, 55.

CORPORATIONS —

distinguished from partnerships, 58.
promoters of, not partners, 59.

stockholders in illegal or defective corporations, liability as
partners, 61.

illegal or unauthorized corporations, 61.

de facto corporations, 62.

defects in organization, 62.

knowledge of lack of corporate existence, 64.
as partners, 90.

CREDITORS —

see, also, "Rights and Liabilities."
priorities of firm and individual creditors, 229.
rights ajid liabilities on dissolution, 288.
application of assets to debts, 223.

CRIMES —

liability for crimes of co-partners. 205.

D.

DEATH —

of partner, survivorship, 128, 129.

realty descends to heirs of deceased partner, 132.

of partner works dissolution by operation of law, 261.

rights and liabilities of surviving partner, 280.

rights and liabilities of estate of deceased partner, 286.

DEBTS—

see "Creditors," "Rights and Liabilities."

liability of subpartner for debts of principal firm, 12.

DEEDS —

of realty to be held as partnership property, 124, 127.

power of partner, 191.

liability of partner on sealed instruments, 198.

by partnership, how executed, 198.

INDEX. 347

References are to pages.

DEFINITIONS—

active partners, 79.

articles of partnership, 147.

capital of firm, 113.

delectus personarum, 6, 7.

dormant partners, 80.

general partnership, 76.

general and special partners, 82, 294.

gross profits, 42.

gross returns, 42.

incoming partners, 81.

joint-stock companies, 290.

lien of partner, 176.

limited partnerships, 293.

liquidating partner, 81.

nominal partners, 81.

ostensible partners, 79.

partner's share, 127.

partnership, 2.

partnership property, 118.

quasi-partners, 81.

retiring partner, 81.

secret partners, 79.

silent partners, 79.

special or particular partnerships, 77.

trading and non-trading partnerships, 78.

universal partnerships, 76.

DELECTUS PERSONARUM —

definition, 6, 7.

an essential element of partnership, 7.
exceptions to rule, 10.

the fundamental principle, 7.

consent to transfer of interest given in advance, 8.

none in joint-stock companies, 11.

principle not violated by subpartnerships, 11.
DISQUALIFICATION —

of one partner to sue, effect on cause of action, 245.

DISSENT —

restriction of power of partner by, 193.

DISSOLUTION —

change of membership operates as, 8.

348 INDEX.

References are to pages.
DISSOLUTION (continued) —

transfer of shares in mining partnerships does not operate as,

10.
return of capital on, 116.
notice of, 213.

dormant and secret partners, 214.
sufficiency of notice, 216.
torts, 215.
of partnership, 260 et seq.
by operation of law, 260.
how effected, 260.
death of partner, 261.
insolvency or bankruptcy, 262.
marriage of female partner, 262.
business of partnership becoming unlawful, 263.
by act of parties, 263.

expiration of term, 263.
accomplishment of object, 263.
by mutual consent, 264.
by act of one partner, 265.

no dissoluble partnership, 266 .et seq.
by change in membership, 268.
transfer of partner's interest, 269.
by decree of court, 269.
grounds for, 270.
fraud, 270.
insanity, 271.

hopelessness of success, 272.
misconduct of partner, 272.
rights and liabilities after dissolution, 273.
of partners generally, 274.
of liquidating partners, 277.
of surviving partners, 280.

actions by and against surviving partners, 280.
particular powers, 282.
right to compensation, 282.
liability to estate of decedent, 282.
of estate of deceased partner, 286.
of creditors, 288.
of limited partnership, 298.

DISTRIBUTION —

of assets, 227 et seq.

INDEX. 349

References are to pages.

DORMANT PARTNERS —
who are, 80.
as a party plaintiff, 242.

DOWER —

in partnership lands, 145.

E.

ENTITY —
firm as, 97.

limited recognition as, 99.
mercantile and legal view of firm, 99.
statutory recognition of firm as, 100.

EQUALITY —

presumption of, in partnership property, 135.
EQUITY —

equitable remedies between partners, 256.
ESTOPPEL —

partnership by estoppel, 17.

liability for torts by, 65.

partnership by holding out, 65.

requisite character of holding out, 67.
creditor's knowledge of holding out, 69.

EVIDENCE—

of partnership, sharing profits, 16 et seq.

sharing profits and losses as evidence of an intention to be part-
ners, 34.

sharing both profits and losses prima facie evidence of partner-
ship, 34.

sharing profits with nothing said about losses, 36.

sharing profits with stipulation against losses, 39.

sharing gross returns, 41.
EXECUTION —

against partner's share, 137.

against individual property for firm debt, 208.
EXPULSION —

of partner, 174.

F.

FIRM —

capital of, see "Capital."

as an entity, see "Entity," 97.

name, see "Firm Name."

350 INDEX.

References are to pages.
FIRM NAME —

necessity of, 102.

use and purpose of, 103.

what name may be adopted, 106.

in absence of statute, 106.

statutory regulation, 108.
exclusive right of firm to trade name, 170.
use of, after dissolution, 111.
liability on contracts executed in, 196.
liability on bills and notes, 197.
liability on sealed instruments, 198.
actions in, 240.
limited partnership, 296.

FIRM SIGN —

in case of limited partnerships, 296.

FRAUD —

liability for, 200.

fraudulent conversion of individual property, priorities in firm
assets, 232.

as ground for dissolution, 270.
FRAUDS, STATUTE OF—

necessity of written contract of partnership, 84.

FRAUDULENT CONVEYANCES—

of partnership assets, 224.
FUTURE PARTNERSHIPS —

contracts for, 49.

G.

GENERAL PARTNERS —

who are, 82.

defined, 294.
GENERAL PARTNERSHIPS —

definition, 76.

GOOD FAITH —

duty of partner to observe good faith towards co-partner, 152.

GOOD WILL —

compared with that of individuals, 110.

rights after dissolution, 110.

is prima facie partnership property, 121, 122.

GROSS RETURNS —

agreements to share does not constitute partnership, 41.
gross profits, meaning of, 42.

INDEX. 351

References are to pages.

GUARANTY —

power of partner, 192.

HOLDING OUT —
see "Estoppel."

HUSBAND AND WIFE —
as partners, 89.

H.

I.

INCOMING PARTNERS —

who are, 81.

assumption of debts, 210.
INDEMNITY —

right of partner to, 159.

ho wand when enforced, 162.
INFANTS —

capacity to be partners, 88.

ILLEGAL PARTNERSHIPS —

partnerships for purposes prohibited by law ,94.
effect of illegality, 95.

INSANE PERSONS —
as partners, 88.

INSANITY —

as ground for dissolution, 271.

INSOLVENCY —

fraudulent conveyances of assets, 224.
dissolution by operation of law, 262.

INTENTION —

the real test of partnership, 21.

what must be intended to constitute partnership, 26.
sharing profits and losses as evidence of, 34.
sharing profits with stipulation against losses, 39.
INTEREST —

sharing profits in lieu of, 30.

right of partner to interest on balances, 164.

agreement, express or implied, 165.

in absence of agreement, on capital, 166.

advances, overdrafts, and undivided profits, 167.

INTERFERENCE -r-

by special partner in affairs of limited partnership, 297.

352 INDEX.

References are to pages.

J.

JOINDER OF PARTIES —
see "Parties."

JOINT-STOCK COMPANIES —
definition and nature, 11, 290.
no delectus personarum, 11.
promoters of, not partners, 60.
principles of partnership applicable, 290.
statutory provisions, 292.

JOINT TENANTS —

partners are not, 127.
JUDGMENT —

merger by, termination of liability, 221.

L.

"LAUNCHING" PARTNERSHIP —

partnership must be "launched," 50.

LENDER —

sharing profits in lieu of interest not a partner, 30.

LIABILITIES —

see "Rights and Liabilities."

LIEN —

of partner, 176.

partner's lien superior to rights of copartners and individual
creditors, 229.

LIMITATION OP ACTIONS —

termination of liability by limitation, 222.

LIMITED PARTNERSHIPS —
definition and nature, 293.
sometimes termed special partnerships, 294.
ordinary principles applicable except as modified by statute, 293.
statutory provisions in general, 294.
general and special partners, 82.

general partners defined, 294.

special partners defined, 294.
business in which they may engage, 294.
number of members regulated by statute, 294.
certificate of formation, 295.

must be acknowledged, recorded and published, 295.

INDEX. 353

References are to pages.

LIMITED PARTNERSHIPS (continued) —
affidavit, 295.

contribution of general and special partners, 295.
firm name, 296.
firm sign, 296.

withdrawal, alteration, and interference, 296.
necessity of compliance with statute,- 297.
dissolution and removal, 298.

LIQUIDATING PARTNERS —
who are, 81.

LOSSES —

agreements to share, not necessary to constitute partnership, 36.

stipulation against liability for, 39.

agreement to share losses does not constitute partnership, 45.

M.

MAJORITY —

must act in good faith, 171.
power of, 171.

cannot introduce new member against will of copartner, 7.

express agreements as to power, 171.
matters within scope of partnership business, 172.

power of, in absence of agreement, 171.

change in business or terms of association, 172.

expulsion of partner, 174.

division of profits, 173.
equal division, 172.

MANAGEMENT —

right of partner to participate in, 151.

MARRIAGE —

of female partner, dissolution by operation of law, 262.

MARRIED WOMEN —
as partners, 89.

MASONIC LODGES —

members of, not partners, 54.

MERGER —

by judgment, termination of liability, 221.

23

354 INDEX.

References are to pages.

MINING PARTNERSHIPS —
no delectus personarum, 6, 10.
transfer of shares not a dissolution, 10.
not true partnerships, 10.
what constitutes, 10.

MISCONDUCT —

of partner, ground for dissolution, 272.

MORTGAGES —

power of partner, 192.

N.

NAME —

see "Firm Name."

NEGLIGENCE —

duty of partner to exercise care and skill, 170.

NEGOTIABLE INSTRUMENTS —

power of partners with respect to, 189.

liability of partners on, 197.

parties plaintiff in action by firm, 241. -

NOMINAL PARTNERS—,
who are, 81.
as parties plaintiff, 241.

NOTICE —

to partner is notice to firm, 181.
of dissolution, 213.

by operation of law, 214.

dormant and secret partners, 214.

torts, 215.

sufficiency of, 216.

NOVATION —

as a termination of liability, 220.

OSTENSIBLE PARTNERS —
who are, 79.

OVERDRAFTS —

interest on, allowance in accounting, 167.

INDEX. 355

References are to pages.

P.

PARTICULAR PARTNERSHIPS —

definition, 77.

PARTIES —

actions in firm name, 240.

to actions by and against firm, 240.

actions by the firm, 241.

contracts in the name of one partner, 243.

dormant and nominal partners as plaintiffs, 242.

actions on negotiable instruments, 243.

contracts under seal, parties plaintiff, 243.

in actions for torts, parties plaintiff, 244.

disqualification of one partner to sue, 245.
actions against the firm, 247.

contract in name of one partner, defendants, 249.

dormant and nominal partners as defendants, 248.

under statutes making obligations joint and several, 248.

firm torts, 249.

PARTITION —

partner not entitled to, 133.

PARTNERS —

rights and liabilities of, see "Rights and Liabilities."

powers of partners, see "Powers of Partners."

who are, see "Partnership."

new members cannot be introduced without consent of all, 6.

delectus personarum, 6, 7.

subpartnership, 11.

liability of subpartner for debts of principal firm, 12.
who are, 13 et seq.

sharing profits in lieu of salary, 14.

sharing profits in lieu or rent, 14, 31.

sharing profits in lieu of interest, 14, 30.

servants or agents compensated by share of profits, 29.

creditors receiving debt out of profits, 29.

widow or child of deceased partner receiving annuity out of
profits, 29.

sharing gross receipts, 41.

sharing profits, statutory provisions, 33.

sharing losses only, 45.

co-owners, 55.

356 INDEX.

References are to pages.

PARTNERS (continued)—

co-owners dividing earnings of common property, 43, 44.

common stock or capital not essential, 46.

contracts for future partnerships, 50.

test of present or future partnerships, 51.

members of Young Men's Christian Association, 54.

associations not for profit, 53.

members of co-operative stores, 54.

members of Masonic lodges, 54.

stockholders in corporations, 58.

promoters of corporations and joint-stock companies, 59.

stockholders in illegal or defective corporations, 61.
as to third persons, 64.

by sharing profits, 64.

by holding out, 65.

requisite character of holding out, 67.
classification of, 79.

ostensible partners, 79.

secret partners, 79.

dormant partners, 80.

silent partners, 79.

active partners, 79.

normal partners, 81.

quasi-partners, 81.

general and special partners, 82.

liquidating partners, 81.

incoming partners, 81.

retiring partners, 81.
who may become, 87.

aliens, 87.

married women, 89.

infants, 88.

insane persons, 88.

corporations, 90.

husband and wife as, 89, 90.

partnerships as, 91.
number of, 91.
not tenants in common, 127.
not joint tenants, 127.

nature of interest in partnership property, 127.
lien of, 176.
are mutual agents in conduct of business, 180.

INDEX. 357

References are to pages.
PARTNERSHIP —

what constitutes, 2, 48.
definition of, 2.

not a contract, but a status, 3.
essential elements, 4.
contract between partners, 4.

not formed by operation of law, 4.
agreement not concluded, 5.
delectus personarum, 6, 7.

mining partnerships not true partnerships, 10.
joint-stock companies are partnerships, 11.
subpartnerships, 11.

subpartnership not a violation of principle of delectus
personarum, 11, 12.
sharing profits, 13.

former doctrine, 13.

as to third persons, 13.
reason of the rule, 14, 15.
modern doctrine, 16.

Cox v. Hickman, 13, 16.
as to third persons, 16, 18.
tests of partnership, 18.

profit-sharing as a test of, 16, 17, 18.
mutual agency, 19.
intention the real test, 21.

what must be intended, 26.

common ownership of profits, 26.
ultimate test, common ownership of profits, 26.
a question of construction of contract, 28.
arbitrary tests no longer used, 28.
sharing profits, statutory provisions, 33.
sharing profits and losses as evidence of intention, 34.
sharing both profits and losses, 34.
sharing profits with nothing said about losses. 36.
sharing profits with stipulation against losses. 39.
sharing gross returns, 41.
sharing losses only, 45.
common stock or capital, 46.
what constitutes, questions of law and fact, 2, 48.
contracts for future partnerships, 49.
when it begins, 50. S
conditions precedent to commencement of, 51.

358 INDEX.

References are to pages.
PARTNERSHIP (continued) —

test of present or future partnership, 51.
good faith required, 53.
associations not for profit, 54.
co-ownership distinguished, 55.
corporations distinguished, 58.

promoters of corporations or joint-stock companies, 59.
stockholders in illegal or defective corporations, 61.
as to third persons, 64.
hy sharing profits, 64.
by holding out, 65.

requisite character of holding out, 67.
creditor's knowledge of holding out, 69.
liability for torts, 74.
classification of partnerships, 75.
ordinary partnerships, 75.
joint-stock companies, 75, 290 et seq.
limited partnerships, 75, 293 et seq.
universal partnerships, definition, 76.
general partnerships, definition, 76.
special or particular partnerships defined, 77.
trading and nontrading partnerships defined, 78.
partners classified, 79.
as partners, 91.

purposes of any lawful business for profit, 93.
illegal partnerships, 94.

effect of illegality, 95.
firm as an entity, 97 et seq.
firm name, 102 et seq.

PARTNERSHIP PROPERTY—

priorities in distribution of, see "Priorities."
distinguished from capital, 113.
what is, 113, 118.

depends upon intention, 118.

depends on express or implied agreement, 119.

capital of firm as, 113, 120.

land purchased by co-owners out of profits, 118.

co-owners, partners in profits of common property, 122.
how title is held, 123.

personalty, 123.

realty, 124.
nature of partner's interest, 127.

INDEX. 359

References are to pages.
PARTNERSHIP PROPERTY (continued) —

death and survivorship, 128, 129.

partner's interest is net balance after settlement, 131.

legal title to realty held as tenants in common, 131.

realty chargeable with partnership debts, 131.

realty chargeable with balance due partners, 131.

beneficial interest in realty or equitable title passes to sur-
vivors on death of partner, 132.
sale or partition, 133.

no right to partition, 133.

partners entitled to sale, 133.
proportionate share of each partner, 135.

shares presumed equal, 135.
conversion of realty into personalty, 140.
changing joint into separate property and vice versa, 146.

PAYMENT—

terminates liability for past acts, 217.

PENALTIES—

liability for penalties incurred by one partner, 200.

PERSONAL PROPERTY—

how title is held by partnership, 123.
conversion of firm realty into, 140.

POWERS OF PARTNERS—

after dissolution, see "Dissolution."
actual authority, 179.

principles of agency control, 180.

notice to partners is notice to firm, 181.

admissions and representations, 181.
apparent or implied authority, 182.
agreement restricting powers or partner, 183.
particular powers, 185 et seq.

in trading partnerships, 188.

as to negotiable instruments, 189.

arbitration, 191.

as to deeds, 191.

to transfer undivided interest in property, 128.

to sell specific partnership property, 128.

mortgages, 192.

assignments for benefit of creditors, 192.

confession of judgment, 192.
restriction by dissent, 193.

360 INDEX.

References are to pages.
PREMIUM—

consideration of contract of partnership, 93.

PRIORITIES—

in distribution of firm assets at law and in equity, 227.

in firm property, 229.

firm creditors have priority, 229.

partner's lien superior to individual creditors, 229.
partner's lien superior to claims of copartners, 229.
exceptions to rule, conversion of firm into separate prop-
erty, 232.
separate business, 233.

fraudulent conversion of individual property, 232.
partners are prior to individual creditors, 233.
partners discharged in bankruptcy, 233.
in separate property, 234.

separate creditors have priority in separate property, 234.
exceptions to rule, 236, 237, 238.

no joint estate nor living solvent partner, 236.
fraudulent conversion of firm property by partner, 237.
separate business, 237.
secret partnerships, 237.
individual creditors have priority over firm, 237.
firm debts have priority over debt to copartner, 238.
individual debts have priority over debt to copartner, 238.

PROFITS—

sharing profits as common owners constitutes partnership, 2.
sharing profits as a test of partnership, 18.

former doctrine, 13.

partnership as to third persons by sharing profits, 13.

modern doctrine, 16.

Cox v. Hickman, 13, 16.
statutory provisions, 33.

sharing both profits and losses prima facie evidence of part-
nership, 34.

sharing profits with nothing said about losses, 36.

sharing gross returns, 41.
associations not for profit are not partnerships, 53.
right of partner to obtain private profit, 154.
interest on undivided profits, 167.
division of, 173.

PROPERTY—

see "Partnership Property."

INDEX. 361

References are to pages.

PROVINCE OP COURT AND JURY—

partnership a mixed question of law and fact, 48.

Q.

QUASI PARTNERS—
who are, 81.
equivalent to prior consent to transfer of shares, 8.

R.

REALTY—

partnership property, how title held, 124.
legal title held as tenants in common, 131.
conversion of firm realty into personalty, 140.

RELEASE—

as a termination of liability, 219.
RENEWAL—

limited partnership, 298.
RENT—

sharing profits in lieu of, 31.
REPRESENTATIONS—

of partner, when binding on firm, 181.

RETIRING PARTNERS—
who are, 81.

right to engage in competing business, 110.
RIGHTS AND LIABILITIES—

after dissolution, see "Dissolution."

notice of dissolution, see "Dissolution."

priorities in firm and separate property, see "Priorities."

of partners, grounds of, 17.

of subpartners, 12.

promoters of corporations or joint-stock companies, 59.

stockholders in illegal or defective corporations, 61.

partnership by holding out, 65.

for torts by holding out, 65, 74.

of partners as to capital, 115.

partnership prpoperty, 118.

of partners inter se, 147 et seq.

articles of partnership, 147.

usual provisions in articles, 148.

construction or articles, 149.

302 INDEX.

References are to pages.

RIGHTS AND LIABILITIES (continued) —

right to participate in management, 151.

duty to observe good faith, 152.

obtaining private benefits, 154.

information acquired as partner, 156.

right to carry on separate business, 157.
competing business, 157.
noncompeting business, 158.

right to contribution and indemnity, 159.

limit as to amount of contribution, 161.

contribution in illegal transactions, 161.

how and when enforced, 162.
right to compensation for services, 162.
right to interest on balances, 164.

agreement express or implied to pay interest, 165.

interest in absence of agreement, capital, 166.

interest on advances, overdrafts and undivided profits,
167.
inspection of accounts, 168, 169.
duty to keep partnership accounts, 168, 169.
duty to conform to partnership articles, 169.
duty to exercise care and skill, 170.
power of majority, 171.

express agreement, 171.

of majority in absence of agreement, 171.

matters within scope of partnership business, 172.

change in business or terms of association, 172.
division of profits, 173.
expulsion of partner, 174.
partner's lien, 176.
as to third persons, 179.

power of partner to bind firm, 179.

actual authority, 179.

notice to partner is notice to firm, 181.

admissions and representations, 181.

apparent or implied authority of partner, 182.

agreement restricting powers of partner, 183.
particular powers, 185.

as to negotiable instruments, 189.

in trading partnerships, 188.

assignment for benefit of creditors, 192.
restriction by dissent, 193.

INDEX. 363

References are to pages.

RIGHTS AND LIABILITIES (continued)—
liability on contracts, 195.
bills and notes, 197.
sealed instruments, 198.
reception of benefit by firm, 198.
for torts, frauds and breaches of trust, 200.

misapplication of money or property received for or in cus-
tody of firm, 202.
employment of trust money for partnership purposes, 204.
liability for crimes, 205.
nature of liability, 206.

joint and several liability, 206.
on firm contracts, 206.
statutory changes, 206.
torts and breaches of trust, 207.
extent of liability, 207.

statutory limitation of liability, 207, 209.
stipulations limiting liability, 209.
execution against individual property, 208.
limited partnerships and joint-stock companies, 209.
commencement of liability, 209.
of incoming partner, 209.
assumption of debts, 210.
termination of liability, 212.
for future acts, 212.

terminated by dissolution, 212.
notice of dissolution, when necessary, 213.
for past acts, 217.
payment, 217.
release, 219.
novation, 220.
merger by judgment, 221.
bankruptcy, 222.
limitations, 222.
application of assets to liabilities, 223.
application by partners, 223.
application by court, 227.
priorities in firm property, 229.

firm creditors have priority, 229.
partner's lien, 229.

exceptions to rule, conversion of firm into separate prop-
erty, 232.

364 INDEX.

References are to pages.

RIGHTS AND LIABILITIES (continued) —

fraudulent conversion of individual property, 232.
separate business, 233.
partners discharged in bankruptcy, 233.
partners are prior to individual creditors, 233.
priorities in separate property, 234.

separate creditors have priority in separate property, 234.

s.

SALE—

partner entitled to sale of property on winding up, 133.

SEALED INSTRUMENTS—
liability on, 198.
parties to action on, 243.

SECRET PARTNERS—

who are, 79.
SEPARATE PROPERTY—

changing joint into separate and vice versa, 146.

SERVANTS—

sharing profit in lieu of salary not partners, 29.

SHARES—

transfer of, effect, 8.

consent to admission of transferee as partner necessary, 8.

in mining partnerships may be transferred without consent
of copartners, 10.

in joint-stock companies transferrable, 11.
capital of each partner distinguished from partner's share, 114.
definition of partner's share, 127.
nature of interest in partnership property, 127.

partner's interest is net balance after final settlement, 13L

in realty and personalty the same, 132.
proportionate share of each partner, 135.

presumption of equality, 135.
attachment for individual debt, 137.

SHARING PROFITS—
• see "Profits."

partnerships as to third persons by sharing profits, 64.

SILENT PARTNERS—
who are, 79.

index. 365

References are to pages.
SKILL—

duty of partner to exercise, 170.

SOCIETIES—

members of, not partners, 53.

SPECIAL PARTNERS—
who are, 82.
defined, 294.

SPECIAL PARTNERSHIPS—

see, also, "Limited Partnerships."
definition, 77.

SPECIFIC PERFORMANCE—

of agreement of partnership, 258.

STATUTE OF FRAUDS—

necessity of written contract of partnership, 84.

STIPULATIONS—

limiting liability of partners, 209.

STOCKHOLDERS—

in corporation not partners, 58.

in illegal or defective corporations, 61.

SUBPARTNERSHIPS—
defined, 11.

delectus personarum, 11, 12.
liability for debts of principal firm, 12.

SURVIVING PARTNER—

takes assets charged with trust, 129.
rights and liabilities of, 280 et seq.
rights in respect to firm name, 111.
particular powers, 282.
actions by and against, 284.
liability to estate of decedent, 285.

must account to representatives of deceased partner, 130.
right to compensation, 285.

SURVIVORSHIP—

death of partner, 128.

legal title does not survive, but descends to heirs, 132.
equitable title or beneficial interest passes to survivors for part*
nership purposes, 132.

3GG INDEX.

References are to peses.

T.

TITLE—

to partnership property, how held, 123.
TORTS—

liability for, 200.

by holding out, 65, 74.

misapplication of money or property received for or in cus-
tody of firm, 202.
employment of trust money for partnership purposes, 204.
contribution between partners for, 161.
joint and several liability, 206, 207.

actions for, parties plaintiff, 244.
parties defendant, 248, 249.

TRADING PARTNERSHIPS—
what are, 78, 188 et seq.
power of partners, 188.
TRANSFER—
( of shares, see "Shares."

of partner's interest, effect, 128.
works dissolution, 269.

TRUST—

liability for breach of, 200.

employment of trust money for partnership purposes, 204.

joint and several liability for breach of, 207.

U.

UNIVERSAL PARTNERSHIP—

definition, 76.

w.

WIDOW—

dower in partnership realty, 145.

WITHDRAWAL—

of contribution to limited partnership, 296.

YOUNG MEN'S CHRISTIAN ASSOCIATION—
members of, not partners, 54.

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